Australian market regulator to prioritize protecting citizens from crypto harm

Over the next four years, Australia’s financial watchdog, the Securities and Investments Commission (ASIC), has vowed to focus heavily on cryptocurrencies and decentralised financing (DeFi).

The financial regulator ASIC stated in its recently issued “Corporate Plan” that as “developing technology and products disrupt our financial ecosystem,” it will be focused on “digitally enabled misconducts” as part of its four-year strategic plan that extends to 2026.

ASIC’s chair, Joe Longo, stated that the agency would pay particular attention to fraud and digital assets. Climate risk, our ageing population, rising data and digital technologies, and the notable volatility in the crypto-assets market are all having a revolutionary impact on our regulatory environment.

He stated that in 2021, there were 4,783 reports of cryptocurrency investment scams, resulting in alleged losses of $99 million, on the website Scamwatch, which informs consumers and businesses on identifying, avoiding, and reporting frauds.

ASIC stated that the measures will “protect investors from harms posed by crypto-assets” and include, among other things, encouraging the creation of an efficient regulatory framework, putting in place and overseeing the regulatory framework for exchange-related products, and increasing public awareness of the dangers associated with crypto-assets and DeFi.

At the moment, cryptocurrency and digital exchanges are only weakly regulated, with exchange operators merely obliged to adhere to the general Corporations Act rules and the anti-money laundering laws of the Australian Transaction Reports and Analysis Centre (AUSTRAC). The sector has been urging the government to pass legislation to lower investor risk and turn cryptocurrencies into a recognised and secure asset class.

Although Longo acknowledges “regulation is coming” and that there are “thousands of crypto assets or currencies,” she adds that “we will have to establish a system that suits us, that works inside our present legal and regulatory frameworks.”

(With insights from Cointelegraph)

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