The Australian government is strengthening its market regulator’s digital asset team as part of a three-stage plan to regulate crypto and ensure proper risk disclosure from crypto companies.
According to a joint statement issued on Feb.2 by Australian Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones, the new measures are intended to safeguard customers dealing with cryptocurrency.
The first step of the plan is to strengthen enforcement. The government plans to expand the Australian Securities and Investments Commission’s (ASIC) digital assets team and boost enforcement measures. ASIC will prioritize ensuring that the risks posed by crypto products and service providers to consumers are adequately disclosed.
The next element of this approach is to bolster consumer protection. The government will provide the Australian Competition and Consumer Commission (ACCC) with new tools to protect consumers against crypto-related scams.
The ACCC will use a real-time data-sharing tool to detect and prevent cryptocurrency scams. The eventual regulation of digital asset licensing and custody will also improve consumer protection.
The final element of the plan is to establish a framework for the licensing and custody of digital assets. The new framework will safeguard consumers against business failures and service providers misappropriation of their assets.
However, this framework will not be in place until mid-2023, and its implementation into law will take considerable time.
Australia responds to FTX collapse
Australia has been actively taking steps to address the 2022 crypto contagion, exacerbated by the FTX collapse. The government is cracking down on several companies after failing to act on its concerns about Sam Bankman Fried’s company.
According to Chalmers and Jones, the previous administration never took the time to future-proof regulatory frameworks to protect consumers and navigate this new and developing asset class. The treasurers added that they are acting expeditiously and methodically to help ensure that consumers are adequately protected, and that true innovation can flourish.
On Feb.2, the Australian Treasury published a token mapping consultation paper that seeks feedback on how various domains of the cryptocurrency ecosystem should be regulated.
Additionally, Australia plans to complete its CBDC pilot program in 2023, and at least two major Australian banks plan to develop a stablecoin.