The Australian federal government steps ahead with the crypto companies regulation plan but avoids token regulation.
Australia is a very big region for the crypto sector. This sector is unregulated under the jurisdiction of Australia but still crypto trading is fully legal and people are free to trade the crypto assets. Over the last couple of years, the majority of the crypto companies reported that they failed to obtain banking partners or debanked directly without any notice/warning/cause despite Crypto companies having regulatory authority to get banking services.
On 16 Oct 2023, the Australian Treasury published a consultation paper on the regulation of crypto companies in the jurisdiction of Australia.
Under the consultation paper, there are provisions to regulate the crypto companies to prohibit the potential risks associated with crypto-related investment activities and also push the innovation of the crypto sector under a regulated framework.
The main vision of this new crypto regulatory framework is to arrange the crypto companies under the rules, which are providing crypto services as a broker.
Notably, here the framework has no provisions for the type of crypto assets for example crypto tokens, NFTs, stablecoin, etc. In short crypto token or stablecoin firms will remain untouched with the new crypto regulatory firm.
After the final approval of this framework, all the companies holding more than $3.2 million, or more than $946 per individual, will be required to obtain a crypto license from the Australian Securities and Investment Commission (ASIC).
The majority of the crypto companies welcomed the new regulation approach. In particular, Australian crypto exchange Swyftx’s general counsel Adam Percy called this consultation paper thoughtful & agreed with the proposed regulation framework.
Many crypto entrepreneurs called this move an important need to compete against the other countries that are moving rapidly toward crypto adoption with better strategies with perfect rules & laws and at full pace.
At the same time, many people criticised Australian regulators and said that they are slow and their work is creating huge uncertainty among the crypto companies. Indeed they hinted that the proposed crypto regulation framework is really a good idea but here it is fully uncertain how much time it will take for these new rules to come into effect.