- Australia’s financial watchdog, ASIC, is updating its guidelines to ensure all crypto-related products must secure a financial services license before operating.
- The move follows several failed lawsuits from ASIC against yield-generating products BlockEarn and Finder Wallet.
- The policy changes have been divisive, with some positive on the improved regulatory clarity, while other commentators believe the framework will stifle innovation.
Australian crypto exchanges will need official financial service licenses to operate within the nation, according to new guidelines from the regulatory watchdog, ASIC. The Australian Securities and Investments Commission revealed that it considers Bitcoin and Ethereum – alongside other digital assets – as covered by the Corporations Act.
This means that many Aussie Web3 services, unlicensed under current regulatory standards, must pass several regulations before they can continue operating.
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Regulatory Clarity Key to Innovation
The update to ASIC’s framework isn’t expected to hit shores until late November, with additional legislation potentially sidelined until after the next Australian election in 2025.
At present, Australian regulators have targeted a handful of crypto products in the country – in particular the yielding services Finder Wallet and Block Earner. While local courts found both products to be innocent under current laws, the changes to legislation would see most Web3 platforms require a financial services license under the Corporations Act.
Some in the industry have argued the updates are a good thing, giving companies Down Under a level of regulatory clarity that was missing previously.
…[The law changes] should provide clarity, and will be helpful for certainty around major concepts like whether crypto is a debenture or a security…Industry has been concerned they will end up on the wrong side of enforcement actions, even when they have good intentions.
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Despite the optimism from certain parties, Opposition Senator Andrew Bragg took to social media to voice his displeasure with the policy updates.
The comments came as part of a broader speech at the AFR Cryptocurrency Summit, with Bragg bemoaning the current Government’s lack of regulatory clarity and modern frameworks to deal with the evolving Web3 world.
Mr Bragg also noted the potential for tokenisation of housing to help solve Australia’s growing affordability crisis.
Australia has some of the highest rates of crypto adoption in the world – but it seems the industry will have to continue waiting for key regulators to catch up.
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