Australia to Introduce Financial Licensing for Crypto Exchanges

Australian authorities are forcing exchanges to apply for financial services licenses in an effort to exert more control over the cryptocurrency business. The Australian Financial Review (AFR) reported on this proposed regulatory move, which is anticipated to expand the present licensing regime beyond the rules governing digital currency trade.

New rules are desperately needed, according to Australian Securities and Investments Commission (ASIC) Commissioner Alan Kirkland. He emphasized that additional regulatory advice is required because significant crypto assets like Bitcoin and Ether are already covered under the Corporations Act. During his speech on September 23 at the AFR Crypto and Digital Assets Summit in Sydney, Kirkland offered these observations.

“ASIC’s message is that a significant number of crypto-asset firms in the Australian market are likely to need a license under the current law,” said Kirkland in his statement to Cointelegraph. He underscored ASIC’s commitment to responsible innovation while addressing risks related to consumer harm and market misconduct.

New Guidance Expected to Clarify Crypto Rules

ASIC plans to release updated guidance in the coming months, focusing on the treatment of specific crypto tokens and products under the Corporations Act. This update will refine Information Sheet 225, offering clearer regulatory expectations for the crypto industry. Kirkland noted, “ASIC expects to issue updated draft guidance in the coming months, which we will open up to feedback from the industry.”

ASIC believes that the new licensing requirements will not only mitigate risks but also enhance market integrity and consumer confidence. Kirkland stated, “Licensing and its subsequent protections will mitigate risk while bolstering consumer confidence and market integrity — two elements that are crucial in encouraging innovation in the financial system.”

The anticipated regulatory changes signal a significant shift in Australia’s approach to overseeing the crypto sector, aiming to strike a balance between fostering innovation and protecting market participants.