Australia’s financial regulator is looking to expand licensing requirements for cryptocurrency businesses beyond exchanges as it seeks to bring more companies under the country’s corporations law.
According to a report by Australian Financial ReviewThe Australian Securities and Investments Commission (ASIC) plans to update its guidance, known as “Information Paper 225,” by November. ASIC Commissioner Alan Kirkland said the update will clarify how specific tokens or crypto products should be regulated.
Kirkland said ASIC considers most major crypto assets to fall within the scope of the Corporations Act, signaling a broader regulatory push.
The move follows a proposal by the Australian Treasury last year that would require cryptocurrency exchanges holding a certain volume of assets to obtain an Australian financial services license. While a draft bill is expected this year, its timing remains uncertain, with uncertainty over whether it will be introduced before next year’s federal election.
Australian authorities are concerned about the risks associated with cryptocurrencies. The Treasury has highlighted the failures and vulnerabilities of cryptocurrency platforms, increasing the urgency for regulation to protect consumers.
ASIC has also been active in cracking down on scams, reporting that it has shut down more than 7,300 fraudulent websites since July 2023, including 615 related to cryptocurrency. In August, the Australian Competition and Consumer Commission revealed that more than half of cryptocurrency-related ads on Facebook were either scams or in violation of Meta policies.
The crackdown follows alarming figures from the Australian Competition and Consumer Commission (ACCC), which reported that investment scams cost Australians almost $1.3 billion in losses in 2023.
ASIC has highlighted the recent shutdown of a major cryptocurrency scam website, Dexa Trade Markets, which falsely claimed to have international regulation, billions of dollars in trading volume and millions of investors. The regulator noted that the site was shut down just one hour after being reported to the removal service provider.
Interestingly, ASIC filed a complaint against the Australian Securities Exchange (ASX) last month, accusing the exchange of making misleading and deceptive statements regarding its now-abandoned blockchain-based project to upgrade its trading systems.
