In addition to educating the public about crypto-assets and decentralized finance, it will also take steps to increase the public’s awareness of the risks involved.
Crypto and decentralized finance (DeFi) have been placed firmly on the radar of Australia’s securities regulator, the Australian Securities and Investments Commission (ASIC).
On Tuesday, ASIC released its newly released “Corporate Plan,” in which it stated, “digitally enabled misconduct will be a key focus for ASIC’s four-year strategic plan that stretches to 2026, as emerging technologies and products change the financial ecosystem.”
In a recent interview, ASIC chairman Joe Longo said the regulator would focus mainly on scams and crypto-assets.
We are experiencing an era of change and evolution in our regulatory environment. We are seeing climate risks, aging populations, digital technologies, and significant volatility in the crypto-asset market.
In 2021, Scamwatch reported 4,783 crypto investment scams and $99 million in reported losses, a website that offers consumer and business resources for avoiding and reporting scams.
Crypto-assets pose a threat to investors, so ASIC said it would be taking a number of actions to protect them. These include fostering the development of an effective regulatory framework, implementing and monitoring the regulatory model for exchange products, and educating the public about crypto-assets and DeFi.
Longo, in a report published in the Sydney Morning Herald on Wednesday, said crypto investing is “a high-risk, high-volatility activity” and consumers should be careful.
Blockchain technology and the distributed ledger aren’t to be confused with investing in crypto assets, inverted commas.” “ASIC is not against innovation, and will work hard to find lawful ways to use underlying technologies such as distributed ledgers and blockchains.”
By the end of the year, ASIC will launch an exercise to map tokens in the crypto sector as part of the new Australian government’s regulatory plans.
Regulation could be a step closer
In the immediate future, cryptocurrency and digital exchanges will be subject to loose regulation, with exchange operators only required to follow AUSTRAC’s anti-money laundering laws and the Corporations Act in general.
To establish cryptocurrencies as a safe asset class and reduce investor risk, the industry has been urging government legislation.
In spite of this, Longo admits “regulation is coming” but that it must be designed to be integrated into existing legal and regulatory arrangements.
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