Thursday, September 21, 2023

Australia is backing cryptocurrency regulators in a “multi-phase” plan to fight scams


The Australian government is strengthening its market regulator’s digital assets team as part of a “multi-phase approach” aimed at clamping down on cryptocurrencies and ensuring proper risk disclosure from crypto firms.

a Feb. Joint Statement No. 2 from Australian Chancellor of the Exchequer Jim Chalmers and Assistant Treasurer Stephen Jones made it clear that the new measures are intended to protect consumers who transact with cryptocurrency.

The treasurers said the multi-phase approach would include three components, including strengthening enforcement, strengthening consumer protection, and establishing a framework for token mapping reform.

One of the major changes will be to increase the size of the ASIC’s digital assets team and “strengthen enforcement action”.

Chalmers and Jones said ASIC will focus on ensuring that risks to consumers from crypto products and service providers are appropriately disclosed.

Cointelegraph reached out to ASIC to find out how many additional positions would be filled but did not receive an immediate response.

Meanwhile, the government is set to introduce new tools to the Australian Competition and Consumer Commission (ACCC), the country’s competition watchdog, to protect consumers from cryptocurrency-related scams. It noted that fraud losses involving crypto payments totaled $221 million in 2022.

The new tool will come in the form of a real-time data sharing tool that ACCC will use to identify and prevent crypto scams.

Consumer protection will also be enhanced upon finalization of a framework to regulate the licensing and maintenance of digital assets “to ensure that consumers are protected from avoidable business failures or from misuse of their assets by service providers.”

However, this framework will not begin until mid-2023, and it will likely be a long time before it can be implemented into legislation.

Related: An overview of cryptocurrency regulations in Australia

“The previous government has engaged in cryptocurrency policy but has not taken the time to future proof our regulatory frameworks to protect consumers and guide this new and emerging asset class,” the treasurers said, adding:

We act swiftly and methodically to ensure consumers are adequately protected and true innovation flourishes.”

The Australian Treasury released the Token Mapping Consultation Paper on February 3rd. 2, which attempts to determine which elements of the cryptocurrency ecosystem will be regulated and to what extent.

The multi-phase approach plan was fast-tracked after the catastrophic collapse of FTX in November, which affected more than 30,000 Australians and 132 Australian-based companies.