Australia to develop new rules for cryptocurrency exchanges

The Australian Securities and Investments Commission said it will develop a new framework "for applying the principles for regulating market infrastructure providers to crypto exchanges"

What has happened?

The Australian Securities and Investments Commission (ASIC) has revealed that it wants to develop a new approach for regulating cryptocurrency exchanges and increase the monitoring of initial coin offerings (ICOs) to protect investors.

What does this mean?

The regulator has issued its corporate plan for 2018–2022, in which it outlines key areas of focus for that period, including cryptoassets and ICOs.

It said that although the sector still represents a small portion of global assets, its fast growth is resulting in increased regulatory monitoring.

For the period between 2018 and 2019, the regulator will concentrate on "monitoring threats of harm from emerging products", such a ICOs and cryptocurrencies.

During that time, ASIC will develop a new framework "for applying the principles for regulating market infrastructure providers to crypto exchanges".

It will monitor emerging products, such as ICOS, and will intervene "where there is poor behaviour and potential harm to consumers and investors".

The regulator also said that it had formed internal cross-team working groups to better co-ordinate its work on new supervisory approaches, and in relation to poor practices in a variety of sectors, including cryptocurrencies.

In May, ASIC issued an investment warning in respect of ICOs, calling them "high-risk speculative investments" and telling investors that they may lose some or all their money if a project fails.

A month before, the Australian Transaction Reports and Analysis Centre, the country's financial intelligence agency, set new rules that cryptocurrency exchanges must follow to combat money laundering and terrorism financing.

Next steps

If you want to take advantage of blockchain's huge potential and disruptive impact, while avoiding falling foul of ever-developing regulatory and legal requirements, visit our Hogan Lovells Engage Blockchain Toolkit.

Matthew Johnson
Michael Brady
Senior Associate
Languages English
Topics Blockchain
Countries Australia


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