The Australian government, through its financial regulator, ASIC (Australia Securities and Investments Commission), has hinted the public about plans to further tighten the strings of the law upon cryptocurrency exchanges and Initial Coin Offering in the country. This is according to the regulatory body’s recent publication entitled; “Corporate Plan.”
The ASIC, which is a prominent regulatory and oversight body for the financial market operators in Australia, has highlighted the virtual currency exchange sector as an area of priority from now till 2022.
Notably, the agency has initiated plans to ensure that any “threats of harm” whatsoever which might ensue from the fast-growing sector are within the scope of its mitigated regulatory remit. It announced in the Plan stating that; “Potential harms from technology driven by the growing digital environment and structural changes in financial services and markets.” Further stating that;
“We will continue to focus on monitoring threats of harm from emerging products (e.g., ICOs and crypto currencies), cyber resilience, the adequate management of technological solutions by firms and markets, and misconduct that is facilitated by or through digital and/or cyber-based mechanisms.”
In the light of current development, it is no doubt that the Australian Securities and investment Commission wants to have a closer look into the Initial Coin Offerings in particular as it has a lot of controversies ranging from fraud to other irregularities. The regulator aims to achieve full compliance, and nothing short of it would be condoled. The report outlines referenced one of its 2018-19 “projects” as;
“Monitoring emerging products, such as ICOs, and intervening where there is poor behaviour and potential harm to consumers and investors.”
While ensuring ICOs full compliance is the first area of focus of ASIC, the second area of focus for the coming year according to the financial regulator as; “developing our approach for applying the principles for regulating market infrastructure providers to crypto exchanges.”
It seems as though a coincidence (however controversial) that the financial regulators are coming out with this publication as it almost one week that Australia witnessed its first digital currencies exchange raising funds through an ICO which gave birth to countless enquires from other securities regulator of the Australian Securities Exchange (ASX) over its ICO project.
Despite the regulatory atmosphere surrounding ICOs and crypto exchange platforms in Australia, it is not much of a surprise to witness that a crypto startup, Byte Power Group, has initiated plans to launch its own virtual currencies exchange. While the question of regulations and compliance came up, the firm insisted that it met with the requirements to proceed with its tokens sales in the crypto market. Nevertheless, the company has also revealed that it is currently seeking legal advice so as to remain within the purview of the law.
It is important to note that in early May, the Australian Securities and Investment Commission announced that it would scrutinize the ICO issuers by issuing a public notice which revealed that the agency as noticed; “misleading or deceptive” marketing statements. ASIC in May reportedly stated that; “As a result of our inquiries, some issuers have halted their ICO or have indicated the ICO structure will be modified.”
As a matter of fact, domestic cryptocurrency exchanges in Australia have been regulated already under the scope of the AUSTRAC (Australia Transactions and Reporting and Reporting Analysis Centre), which is the agency saddled with the responsibility to ensure financial security and also a watchdog for the financial sector in general.
According to the laid-down rule of the government through its watchdogs, Exchanges operators are expected to enroll in the authority’s ‘Digital Currency Exchange Register’ and also comply fully with mandatory Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) obligations coupled with the Know Your Customer (KYC) requirement
Before the regulations were promulgated in April 2018, the Australian Senate has already enacted rules that give AUSTRAC the required statutory backing to monitor domestic virtual currencies exchange in December 2017.
The magical effect full compliance will have on the cryptocurrency cannot be overemphasized as this will further boost the integrity of the cryptocurrency sector which is a core value of all financial activities, it would also clear the rather erroneous perception that cryptocurrencies belong to the illegal business underworld. This will consequently open doors to more investors into the crypto market which might translate to yet another boom in the cryptocurrency sector.