• ASIC has put in place a sturdy cryptocurrency licensing framework that requires many cryptocurrency corporations to acquire a license.
• Underneath the nation's present rules, crypto belongings are thought of monetary devices.
• Current Legislation Insufficient to deal with the distinctive traits of cryptocurrencies.

The Australian Securities and Investments Fee (ASIC) has launched new guidelines concerning cryptocurrency licensing beneath the Firms Act.

Talking on the AFR Digital Asset Summit on Monday, ASIC Commissioner Alan Kirkland famous that many cryptocurrencies at the moment are categorised as monetary devices, that means some cryptocurrency corporations might want to get hold of licenses.

ASIC's regulatory modifications spotlight shortcomings in present insurance policies which might be primarily targeted on monetary devices. These insurance policies cowl monetary investments, danger administration and non-cash transactions. Nevertheless, this framework has struggled to adapt to the distinctive nature of cryptocurrencies, creating uncertainty concerning the licensing necessities for sure cryptocurrency transactions.

Talking concerning the nation's efforts in direction of investor safety, Kirkland mentioned ASIC's new coverage will assist mitigate the dangers related to cryptocurrencies. He additionally shared the Fee's considerations concerning the potential risks of the market and promised that licensing rules will construct client confidence and strengthen market integrity.

Clarification of cryptocurrency classification

In response to ASIC's discover, confusion within the present regulation has meant that many crypto builders within the nation have but to acquire an Australian Monetary Providers Licence (AFSL), main the fee to replace the act by November 2024 to make clear the classification and therapy of assorted crypto belongings.

Additionally learn: Australian cryptocurrency market: Monochrome's IBTC ETF leads the drive for transparency

Australia has already begun to take a more in-depth have a look at the cryptocurrency business and has stepped up enforcement measures. Regulators have made it necessary for crypto corporations to acquire licenses earlier than providing providers to prospects. A latest instance of Australia's evaluate of cryptocurrency rules is the investigation into BitTrade, the native operator of cryptocurrency alternate Kraken.

ASIC alleges that Kraken did not adequately inform Australian prospects concerning the dangers of margin buying and selling, inflicting important monetary losses. Moreover, the company alleges that BitTrade supplied margin merchandise with out the suitable licenses, thereby breaching regulatory necessities.