Australia Proposes Stricter Crypto Oversight

Australia Proposes Stricter Crypto Oversight to Enhance Consumer Protection

Australia’s securities regulator has introduced proposals for stricter oversight of the crypto market, aiming to enhance consumer protection and ensure compliance with existing financial laws.

The Australian Securities and Investments Commission (ASIC) announced Consultation Paper 381 on December 4, outlining plans to address regulatory gaps in the crypto industry and promote the growth of “responsible financial innovation” while ensuring consumer protection.

Regulatory Gaps and Practical Licensing Issues

ASIC Commissioner Alan Kirkland stated that the regulator wants to promote the growth of responsible financial innovation while ensuring consumer protection, adding that a well-regulated financial system benefits everyone in the community.

Many digital assets and related products are financial products under the current law. Stakeholders have been calling for greater clarity and in response, we are releasing our draft updated guidance.

The securities watchdog wants to add 13 practical examples of how the current financial product definitions could apply to cryptocurrencies and related products, such as stablecoins and wrapped tokens.

Key Proposals and Next Steps

The consultation paper includes suggestions on potential regulatory relief measures and transitional approaches for businesses adapting to updated guidance. ASIC is also exploring a “no action” position for firms in the process of applying for or modifying licenses.

Public feedback is open until February 28, 2025, with ASIC planning to finalize INFO 225 by mid-year.

Crypto Taxation Review

Australia is also reviewing its approach to crypto taxation, with the Department of Treasury seeking guidance from the Organization for Economic Cooperation and Development (OECD). The Treasury is weighing two options: adopting the OECD’s Crypto Asset Reporting Framework or tailoring it to domestic needs.

The Crypto Asset Reporting Framework (CARF) aims to boost tax transparency by collecting data on crypto transactions, including purchases over $50,000, and sharing it with global authorities.

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