Australia’s ASIC is planning to release a new mandate for crypto businesses to fetch regulatory license. According to the regulator’s statement on December 4th, cryptocurrency exchanges and businesses that deal with digital assets would no longer be able to avoid expensive licensing.
The regulator also published a consultation paper on new “proposed guidelines” for crypto sector. The paper classified many digital assets as financial products and stipulated that the majority of companies that deal in cryptocurrencies must hold a license.
The paper and change in laws would come at a time when ASIC has been increasing its scrutiny over the crypto sector for quite some time now.
ASIC Proposes New License Law In Australia
With the published paper, the regulator illustrated how current definitions of financial products might apply to cryptocurrency enterprises by citing 13 product examples, ranging from meme tokens to cryptocurrency wallets.
ASIC is now seeking industry feedback on the same to allow the regulator to understand and implement the new laws in the sector.
ASIC’s Previous Scrutiny On Crypto Sector
ASIC had previously announced that, in light of the rise in cryptocurrency scams in the nation, it would update its regulations pertaining to crypto companies.
The changes in the laws is a direct result of the increasing crypto scams in the nation. Investment scams cost Australians A$382 million in fiscal year 2023–2024, with cryptocurrencies being used in 47% of the scams. The cost of investment scams to Australians in 2022 was A$1.3 billion.
Additionally, the Australian Federal Police identified more than 2000 compromised Australian cryptocurrency wallets as part of a global operation in which they collaborated with a blockchain data platform to target criminal cryptocurrency scammers.
The coordinated operation, called Operation Spincaster, targeted crypto-criminals using a tactic called “approval phishing,” which has been used to steal over $4 billion in Bitcoin from unsuspecting victims worldwide since May 2021.
The AFP has also developed additional intelligence on scam tactics and is currently looking into the losses in Australia discovered in Operation Spincaster in an effort to help prevent more Australians from becoming victims of cryptocurrency scams.
Australia’s Crypto Growth To Triger Wider Adoption In The Nation
Australia’s crypto sector growth is likely to give a push to the adoption of digital assets in the nation. It is anticipated that Australia’s cryptocurrency market will generate A$799.3 million by 2024.
The industry is poised to grow at a compound annual growth rate (CAGR 2024-2025) of 4.84%, with a projected total revenue of A$760.6 million by 2025.
According to estimates, the cryptocurrency market will generate A$70.6 on average per user in 2024. The rise in blockchain startups and cryptocurrency exchanges in Australia is indicative of the nation’s growing interest in cryptocurrencies.