Australian Regulators to Impose New Licensing Rules on Crypto Exchanges, But Why?

Australian regulators are reportedly developing new guidelines for crypto assets. These guidelines will require exchanges to obtain financial services licenses if they must operate exchanges in the country.

The new rules aim to expand cryptocurrency exchange licensing requirements beyond digital currency exchanges. According to a report by the Australian Financial Review (AFR), this change will affect a broader range of cryptocurrency services in the country.

Kirkland Emphasizes Need for Clear Guidance on Crypto Regulation at AFR Summit

Alan Kirkland, the commissioner of the Australian Securities and Investments Commission (ASIC), says the new regulations are vital for Australia's cryptocurrency industry.

Kirkland explained that ASIC views most major crypto assets, such as Bitcoin (BTC) and Ether (ETH), as falling under the scope of the Corporations Act.

Furthermore, Kirkland outlined the authority's plans to enforce stricter licensing requirements. This indicates that the regulatory body intends to treat major cryptocurrencies as part of the broader financial system.

The commissioner made these comments during the AFR Crypto and Digital Assets Summit held in Sydney on September 23.

ASIC plans to update the Corporations Act's Information Sheet 225 to include clear guidelines on regulating certain cryptocurrencies and products. By addressing these details, ASIC seeks to improve understanding and compliance within the cryptocurrency sector.

Kirkland highlighted this initiative and emphasized its importance to the industry before appearing at the Crypto event. ASIC's message is that many crypto-asset companies in Australia will likely need a license under the current law," he noted

Also, Kirkland explained that ASIC supports safe innovation in the crypto field. However, it is concerned about possible harm to consumers and misconduct in the market, which it aims to tackle through regulation.

He added that ASIC plans to release updated draft guidance in the next few months. It will also gather feedback from industry participants regarding this.

Senator Bragg Calls Out Labor for Abandoning Digital Asset Framework and Stalling Innovation

The news about ASIC's upcoming guidance follows criticism from Senator Andrew Bragg. Bragg criticized Australian regulators for not being proactive in regulating the crypto market.

On September 23, the Senator pointed out that Australia was expected to establish crypto regulations years ago. He referenced Finance Minister Stephen Jones, who had stated that the Labor Party would prioritize safety and transparency" in its approach to crypto.

In addition, Senator Bragg criticized the government for abandoning the 2022 regulatory framework. With this framework, the government intended to regulate crypto asset secondary service providers (CASSP) after the election.

He pointed out that the Labor government released the consultation paper only after 8 months instead of moving forward. He complained that the government has been silent on this critical issue, stalling progress in regulating the crypto sector.

Senator Bragg also predicted that Australia will unlikely advance crypto regulations during the parliamentary term. He accused Labor of wasting three years by focusing only on their interests.

Bragg argued that by keeping Australia in the crypto slow lane', Labor has denied Australians the chance to benefit from blockchain technology.

Meanwhile, Australia's Committee on Economics Legislation had opposed passing Brag's crypto regulation bill. The committee cited the need for more research on the matter.

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