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New Crypto Regulatory Framework Australia

Recently, some statements have been made regarding new guidelines in cryptocurrency by The Australian Securities and Investment Commission (ASIC) about the Initial Coin offering (ICO) mining, and trading, that is highlighted by the Australian corporations and the requirements regarding the inconveniences that occurred in the past 2017.

The new rules focus on the laws established about the signatures of the cryptocurrencies under the Australian companies law and the laws added to it. In more detail, the Securities Regulator specifies the steps required for a company focused on encryption that must be carried out with the ASIC and Australian corporation’s laws.

With respect to the established regulation, crypto will be considered as financial products, although it will be necessary to request the approval of the Australian regulators in order to acquire the necessary licenses for their implementation based on the laws.

Also, the established regulations will definitely bring another important purpose, in words of the regulator: “These regulatory requirements are in place to maintain the integrity of Australia’s financial market and ensure consumer protection.”

In this particular topic, the ASIC on the past 2018 have their focus on investors protection, the commissioner on this issue had been quite clear with those who perform the practices with keeping one foot out of the boat to understand the risks involved in the actions it may entail.

Back in 2019, the ICO and the ASIC modernized cryptocurrency trade framework do not cover the guidelines for other regulators, such as the country’s tax agency and the consumer protection group. The securities regulator says that the crypto businesses will have to make reference to the laws published by the respective agencies.

In the first published guidelines, the Australian Securities and Investment Commission said it wanted token issuers to keep their eyes open about the potential applications of the country’s Corporations Act of 2001 to ICOs. Remarking on the first ICO framework, ASIC Commissioner John Price declared:

“We want to ensure innovative firms understand the regulatory framework they may be operating under and ensure they meet any obligations they may have when raising funds in Australia.”

The statements of ASIC in this approach, encourages the producers of tokens to observe carefully and accurately if their ICO is a financial product or not. In the Austrian country, the concept of a financial product also expands to offers that involve a monetary movement.

In this way, the ICOs that contribute securities, derivatives, NCPs and managed investment schemes would be considered financial products.

 

Conclusion

Without the corresponding license granted on the basis of the new regulations, any practice considered to have an unauthorized ICO will be considered illegal in Australia, which can mean a huge gap within the terms of the law for those responsible and for those involved in it the use of them.

This will ensure a higher level of security with respect to the implementation of the currencies used in the market, and adequately protect its users.