Crypto Exchanges in AU Require Financial Licenses Starting in 2024: ASIC Expands Act

Australian regulators are reportedly drafting new
legislation that will require cryptocurrency exchanges to obtain financial
services licenses. This will expand the current licensing requirements, which
apply primarily to digital currency exchanges. The Australian Financial Review
(AFR) shared details of these upcoming changes.

Further Crypto Regulations Needed

Alan Kirkland, a commissioner at the Australian Securities
and Investments Commission (ASIC), explained the regulator’s reasoning. He
stated that the Corporations Act already covers most major crypto assets, such
as Bitcoin. However, further regulations are needed to ensure clearer oversight
of the sector.

Kirkland revealed these plans during the AFR Crypto and
Digital Assets summit in Sydney on September 23. He also mentioned that the
ASIC is preparing to update the Corporations Act’s Information Sheet 225.

This
update will clarify how certain crypto tokens and products should be treated
from a regulatory perspective. The new legislation is expected to be issued by
November 2024.

🇦🇺 Australia will require crypto firms to obtain financial licenses as ASIC plans to update guidance on crypto assets, now seen as financial products, by November.https://t.co/z78kPXIw54

— Telo News (@Telo_Official) September 23, 2024

“ASIC’s message is that a significant number of crypto asset
firms in the Australian market are likely to need a license under the current
law,” the commissioner stated. “This is because we think many widely traded
crypto assets are a financial product,” Kirkland noted.

New FMI Laws Strengthen Oversight

Meanwhile, the ASIC
has gained enhanced regulatory powers through reforms to the country’s
financial market infrastructure (FMI) laws, as reported by Finance Magnates.

The Treasury Laws Amendment Bill 2024, which received Royal
Assent on September 17, introduces new measures to improve the oversight of key
entities in Australia’s capital markets. These include financial market
operators, benchmark administrators, clearing and settlement facilities, and
derivative trade repositories, aiming to boost stability and efficiency.

This article was written by Tareq Sikder at www.financemagnates.com.