Australia’s market regulator to prioritize protecting citizens from crypto harm
Australia’s financial regulator, the Australian Securities and Investments Commission (ASIC) has promised to put cryptoassets and decentralized finance (DeFi) firmly in its sights over the next four years.
According to ASIC’s newly released “Corporate Plan” released on Tuesday, the financial regulator said it will focus on “digitally enabled misconduct” as “emerging technologies and products change our financial ecosystem” as part of the four-year strategic plan that extends to 2026.
Joe Longo, chairman of ASIC, said the regulator will focus specifically on fraud and crypto-assets.
“Our regulatory environment is changing and evolving – climate risk, our aging population, new data and digital technologies, and significant volatility in the crypto-asset market are all having a transformative effect.”
He noted that Scamwatch, a website that provides information to consumers and businesses on recognizing, avoiding and reporting scams, received 4,783 reports of crypto investment scams and $99 million in reported losses in 2021.
ASIC said the actions will “protect investors from harm caused by crypto-assets” and include supporting the development of an effective regulatory framework, implementing and monitoring the regulatory model for exchange-related products, and raising public awareness of the risks inherent in crypto-assets and DeFi, among others actions.
In a Wednesday Sydney Morning Herald report, Longo again warned against investing in crypto, describing it as “a very risky and very volatile activity” and consumers “should be very careful before doing so.”
“ASIC is not against innovation and will do everything they can to look for legal ways to use the underlying technology, the distributed ledger and blockchain technology, but it should not be confused or confused with investment, inverted commas, in crypto-assets.”
ASIC’s announcement came just days after Australia’s new ruling government announced plans to move forward with regulation of the crypto sector by conducting a “token mapping” exercise by the end of the year.
Regulation may be one step closer
Cryptocurrencies and digital exchanges are only loosely regulated at the moment, with exchange operators only required to comply with the Australian Transaction Reports and Analysis Centres’ (AUSTRAC) anti-money laundering laws and the general provisions of the Companies Act.
Related: Australia’s new government is finally signaling its stance on crypto regulation
The industry has called for government legislation to reduce risk for investors and transform cryptocurrencies into an established and safer asset class.
However, there are thousands of crypto-assets or currencies, and Longo admits that “regulation is coming,” but “we need to design a framework that suits us, that works within our existing legal and regulatory arrangements.”
