The Australian government proposes licensing cryptocurrency trading platforms, along with stricter oversight of customer funds. A proposal published today (Monday) details that Australian crypto exchanges would need to obtain a license from the local financial services regulator.
Still, in a consultation stage, the Australian government is seeking feedback on its proposal until December 1, 2023. Consultation on the bill will continue next year.
"The government is acting methodically to ensure consumers are adequately protected and innovation can flourish," Australian Treasurer Jim Chalmers said in a statement, adding that the rules align with other jurisdictions.
The proposed changes will apply to exchanges with more than $3.2 million (A$5 million) or more than $946 (A$1,500) per individual, requiring them to obtain a license from the Australian Securities and Investments Commission (ASIC).
The regulator will also review the minimum standards for digital assets such as tokens.
๐จ #Crypto Exchanges in Australia ๐ฆ๐บ will soon be required to have a financial services license.
Digital asset platforms that hold more than 5 million Australian dollars ($3.2 million), or 1,500 Australian dollars for an individual, must obtain a permit from the Australian Securities and Investments Commission or... pic.twitter.com/W59VtmDxjs
- Ajay Kashyap (@EverythingAjay) October 16, 2023
"The collapse of digital asset platforms, both locally and globally, has caused Australians to lose their assets or be forced to wait their turn among long lines of creditors," the proposal document states. โThese reforms seek to reduce the risk of these collapses occurring, raising the level of their operations and increasing their supervision.โ
Although the proposal document does not mention any platform, now collapsed FTX operates in the country with a local subsidiary. The local regulator also lapses found in Binance's crypto derivatives offering, leading to closure of those services for the exchange.
Supports and criticisms
Meanwhile, the local crypto industry appears divided over Australia's decision to require licenses for exchanges.
Adam Percy, CEO of local cryptocurrency exchange Swyftx, called the proposed rules โthoughtful,โ adding that โthe primary focus should be on ensuring that cryptocurrency users can access blockchain technology with appropriate protections and that there is room for the innovation".
However, Kraken Australia director Jonathon Miller thinks otherwise, saying: โAustralia is now in an unfortunate situation where our regulation has taken a long time, so we are taking the approach of introducing cryptocurrencies into the existing financial services regulation. "
Last month, ASIC sues Kraken's Australian subsidiary for violating the design and distribution obligations of the margin trading product, requesting a civil penalty.
The Australian government proposes licensing cryptocurrency trading platforms, along with stricter oversight of customer funds. A proposal published today (Monday) details that Australian crypto exchanges would need to obtain a license from the local financial services regulator.
Still, in a consultation stage, the Australian government is seeking feedback on its proposal until December 1, 2023. Consultation on the bill will continue next year.
"The government is acting methodically to ensure consumers are adequately protected and innovation can flourish," Australian Treasurer Jim Chalmers said in a statement, adding that the rules align with other jurisdictions.
The proposed changes will apply to exchanges with more than $3.2 million (A$5 million) or more than $946 (A$1,500) per person, requiring them to obtain a license from the Australian Securities and Investments Commission (ASIC).
The regulator will also review the minimum standards for digital assets such as tokens.
๐จ #Crypto Exchanges in Australia ๐ฆ๐บ will soon be required to have a financial services license.
Digital asset platforms that hold more than 5 million Australian dollars ($3.2 million), or 1,500 Australian dollars for an individual, must obtain a permit from the Australian Securities and Investments Commission or... pic.twitter.com/W59VtmDxjs
- Ajay Kashyap (@EverythingAjay) October 16, 2023
"The collapse of digital asset platforms, both locally and globally, has caused Australians to lose their assets or be forced to wait their turn among long lines of creditors," the proposal document states. โThese reforms seek to reduce the risk of these collapses occurring, raising the level of their operations and increasing their supervision.โ
Although the proposal document does not mention any platform, now collapsed FTX operates in the country with a local subsidiary. The local regulator also lapses found in Binance's crypto derivatives offering, leading to closure of those services for the exchange.
Supports and criticisms
Meanwhile, the local crypto industry appears divided over Australia's decision to require licenses for exchanges.
Adam Percy, CEO of local cryptocurrency exchange Swyftx, called the proposed rules โthoughtful,โ adding that โthe primary focus should be on ensuring that cryptocurrency users can access blockchain technology with appropriate protections and that there is room for the innovation".
However, Kraken Australia director Jonathon Miller thinks otherwise, saying: โAustralia is now in an unfortunate situation where our regulation has taken a long time, so we are taking the approach of introducing cryptocurrencies into the existing financial services regulation. "
Last month, ASIC sues Kraken's Australian subsidiary for violating the design and distribution obligations of the margin trading product, requesting a civil penalty.
