Australian Crypto Regulations Aims to Secure Crypto Investors
To support the expansion of digital assets and safeguard consumers, the Australian government is currently in the process of enacting new guidelines. These guidelines stipulate that cryptocurrency exchanges operating within the country must secure a financial services license issued by the Australian Securities and Investments Commission (ASIC).
This licensing requirement for Australian crypto exchanges applies to digital-asset platforms holding assets exceeding A$5 million (approximately $3.2 million) or A$1,500 for individual users. The proposed regulatory framework is an extension of existing laws and is designed to introduce stability and accountability to the digital asset market in Australia. Additionally, these regulations will include strict guidelines governing the custody and transaction standards. Notably, these standards have been influenced by regulatory models already implemented in the United Kingdom, Canada, and Singapore, countries renowned for their robust cryptocurrency regulatory frameworks.
The Australian drive to introduce crypto exchange licensing aligns with the global trend of heightened supervision in the cryptocurrency sector. The cryptocurrency market’s downturn of $1.5 trillion last year exposed vulnerabilities and unsafe practices, leading to the collapse of prominent trading platforms. A prominent case is the bankruptcy of FTX exchange, led by Sam Bankman-Fried, who now faces a multibillion-dollar fraud trial in the United States. These occurrences emphasize the critical importance of robust regulation to protect investors and the broader financial system.
See Also: 3 Ways to Spot and Avoid Crypto Scams in 2023
Around the globe, other nations are also adopting comprehensive measures to regulate digital assets. The United Kingdom is in the process of regulating various cryptoasset activities, encompassing trading, lending, and custody, under the same regulatory framework as traditional financial services. In Canada, firms are obliged to adhere to stricter regulations, with a specific emphasis on segregating customer assets and a prohibition on providing margin or leverage.
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