Australia Proposes Crypto Exchange Regulations for Consultation

Crypto Regulation | Oct 16, 2023

Australian Treasury Publishes Digital Asset Exchange Regulatory Framework for Consultation by December 1, 2023

• The Australian government is keen on regulating the digital asset sector, focusing primarily on exchanges. The aim is to protect consumers, foster innovation, and provide clarity to the industry.
• The government's proposal recommends that crypto exchanges and digital asset platforms be subject to existing Australian financial services laws. Additionally, these platforms will need to obtain an Australian Financial Services Licence.
• Digital asset platforms will also have to adhere to specific obligations, including minimum standards for holding tokens, standards for custody software, and standards for token transactions.

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• Scope: Platforms holding over AUD 1,500 ($946) of an individual's assets or AUD 5 million ($3.15 million) in aggregate will be required to obtain a license from the Australian Securities and Investments Commission.

Timeline and Industry Reactions

• The proposal has garnered mixed reactions from the crypto community:
  • While some, like Swyftx's general counsel, Adam Percy, appreciate the thoughtful approach
  • Others, like Jonathon Miller, director of Kraken Australia, believe the proposal is trying to fit crypto into existing financial services regulation.
• The government expects to release draft legislation covering licensing and custody rules for crypto asset providers by 2024. Once enacted, exchanges will have 12 months to transition to the new regime.

Consultation

The government is actively seeking feedback on the proposed framework.  Feedback on the proposal paper is open until 1 December 2023, with further consultations planned for the subsequent year on the draft legislation.

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Australia's approach to crypto regulation is consumer-centric, aiming to protect users while also ensuring that the industry can innovate and grow. The government's approach seeks to align with international standards and provide a clear roadmap for the future of digital assets in the country.

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• Source: https://ncfacanada.org/australia-proposes-crypto-exchange-regulations-for-consultation/