Australia has further pledged to build a framework for regulating cryptocurrencies due to the ongoing crypto crisis, which erupted in mid-November.
A Wednesday AFR report cited a spokesperson for the Australian Treasury, who stated Canberra aimed to regulate crypto markets next year to protect investors.
The news comes after FTX collapsed around 11 November, with the Treasury stating it would monitor the fallout of the disgraced crypto exchange. This would include “further volatility in crypto-asset markets” and additional “spillovers into financial markets more broadly.”
The spokesperson added: “These developments highlight the lack of transparency and consumer protection in the crypto market, which is why our government is taking action to improve the regulatory frameworks while still promoting innovation.”
Treasurer Jim Chalmers’ spokesperson concluded: “We are closely monitoring the fallout from the FTX collapse, including further volatility in crypto asset markets and any spillovers into financial markets more broadly.”
Australian Crypto Proposal
Crypto assets were “increasingly widespread and” even began appearing on large sporting event advertisements. It urged regulators to ensure customers investing in crypto were “adequately informed and protected,” according to a recent Treasury letter.
Assistant Treasurer, The Hon Stephen Jones MP, continued in his letter, stating the Albanese Government would take a “more serious approach” to determine what was in the ecosystem and the risks involved.
He continued, stating: “The aim will be to identify notable gaps in the regulatory framework, progress work on a licensing framework, review innovative organisational structures, look at custody obligations for third party custodians of crypto assets and provide additional consumer safeguards.”
Crypto Crackdown?
It would create a system of “capital adequacy and auditing standards to demonstrate the operational integrity” for such platforms, he said. Talwar added that it was crucial to do so as many exchanges offer high-yield perks to compete with other platforms, despite a greater risk to investors.
Australian regulators could also lead the industry in regulating digital assets, which may include a ‘token mapping’ platform for identifying how to regulate assets.
He concluded: “When Australia brings in technology-enabling custody rules for centralized holders of crypto-assets, we will either be a leader in the space, or catching up, depending on how fast other jurisdictions, like Singapore and Europe, move to make rules.”
The comments come after the collapse of the FTX exchange, Alameda Research, and nearly 130 linked firms prompted governments worldwide to consider tightening regulations on crypto markets due to the aftermath. Reports have found roughly 30,000 Australians and the collapse hit 132 companies.
