Australia’s Market Regulator To Prioritize Protecting Citizens From Crypto Damage

Australia’s market regulator will prioritize protecting citizens from crypto damage, as the Securities and Investments Commission (ASIC) has promised to prioritize crypto assets and decentralized financing (DeFi) during the next four years.

According to ASIC’s recently revealed “Corporate Plan” issued on August 22, the financial regulator stated it will focus on “digitally enabled misconducts” as “developing technology and products disrupt our financial ecosystem”. This will be a part of ASIC’s four-year strategic plan.

ASIC head Joe Longo stated that the regulator will be concentrating specifically on frauds and crypto-assets.

“Our regulatory environment is changing and evolving — climate risk, our aging population, emerging data and digital technologies, and significant volatility in the crypto-assets market are all having a transformational impact.”

He stated that in 2021, Scamwatch, a website that educates individuals and companies on spotting, avoiding, and reporting scammers, received 4,783 reports of crypto investment scams and recorded losses totaling $99 million.

According to ASIC, the efforts would “protect investors from the damages presented by crypto-assets”. This entails, of course, among other things, supporting the establishment of an effective regulatory framework, while also implementing and monitoring the regulatory model for exchange-related goods. It will also mean boosting public awareness of cryptocurrency hazards that are an inherent part of crypto and DeFi. So it is safe to say that Australia’s market regulator will prioritize protecting citizens from crypto damage.

Longo advised against investing in cryptocurrency again in an Aug. 23 Sydney Morning Herald piece, characterizing it as “a highly dangerous and highly volatile business,” and customers “should be exceedingly careful before you do it.”

“ASIC is not against innovation, and will do whatever it can to look for lawful ways of using the underlying technology, the distributed ledger, and blockchain technology, but that’s not to be conflated or confused with investing, inverted commas, in crypto assets.”

ASIC’s declaration comes just days after Australia’s new governing government revealed plans to begin regulating the crypto industry by the end of the year by completing a “token mapping” operation.

Regulation May Be Just Around The Corner

Cryptocurrencies and digital exchanges are currently relatively lightly regulated, with exchange operators simply obliged to follow the anti-money laundering legislation of the Australian Transaction Reports and Analysis Centre (AUSTRAC) and the basic rules of the Corporations Act.

The sector has been advocating for government regulation to lower investor risk and turn cryptocurrencies into a well-established, safer asset class.

Longo believes that “regulation is coming,” but that “we will have to develop a framework that suits us, that works within our present legal and regulatory systems.”