Joe Longo, the Chairman of the Australian Securities and Investment Commission (ASIC), has tempered the cryptocurrency industry’s anticipation for federal regulation, noting that finalizing licensing processes will require time to prevent high-profile collapses similar to the FTX cryptocurrency exchange.
At the Australian Financial Review Crypto Summit, Longo stated that despite Assistant Treasurer Stephen Jones’s announcement of regulatory plans, global regulators are still grappling with the complexities of this sector. He expressed his belief that it will be very challenging to achieve these regulatory milestones as quickly as some may desire.
The regulatory measures require crypto exchanges to obtain an Australian Financial Services Licence (AFSL) and adhere to additional standards, particularly regarding asset custody. Loosely regulated custody practices have been a significant factor in investor losses, notably in the FTX case.
ASIC is determined to pursue enforcement actions against crypto businesses that issue unlicensed financial products. This commitment is demonstrated through the regulator’s ongoing case against BPS Financial over a crypto product known as Qoin.
The cryptocurrency industry, affected by incidents like FTX’s collapse, recognizes the need for regulation. The government’s proposed regulatory framework aims to balance innovation and consumer protection.
Chloe White, Managing Director of Genesis Block, believes the regulatory measures will help Australia align with other countries that have already implemented similar regulations, focusing on service providers rather than tokens themselves.
Mark Carnegie, founder of MHC Digital Group, views regulation as essential for legitimizing the crypto market. He noted that the lack of regulation resulted in unregulated entities providing digital asset advice, leading to disastrous consequences.
Coinbase CEO Brian Armstrong praised Australia for taking a proactive approach to regulation, emphasizing that such an approach benefits the crypto industry by allowing it to engage in discussions on rule-making.
Assistant Treasurer Stephen Jones believes that the new regulations could lead to consolidation among the 400 crypto exchanges registered with AUSTRAC, as many might be unable to meet the requirements for an AFSL.
Loretta Joseph, who is developing crypto laws for Commonwealth countries, highlighted the importance of careful drafting, given the incorporation of numerous recommendations from global anti-money laundering regulators.
Commonwealth Bank’s Sophie Gilder stressed the need for regulatory clarity before banks can introduce innovations based on crypto technology to ensure customer protection.
Robbie Ferguson, co-founder of web3 gaming start-up Immutable, believes that Australia still has an opportunity to become a global hub for frontier technologists. He noted that good regulation can attract entrepreneurs, capital, and investments.
The regulatory shift has generated some nervousness, with different markets holding various views on the changes. However, there’s hope that these regulations will lead to a more fruitful and safe environment.
This news highlights the challenges and considerations surrounding the regulation of cryptocurrencies and the impact of such regulations on various stakeholders in the industry.
