The Australian Securities and Investments Commission (ASIC) is expanding its digital currency team and says it’s looking to impose more regulation on crypto assets and their respective users, thus making it hard to sell digital currencies within Australia.
ASIC Is Going to Be Tough on Crypto
Under the new rules, all digital currencies would be classified as “financial products.” The decision comes after Ethereum – the world’s second largest digital currency by market cap and the number one competitor to bitcoin – has gone through the Merge and has set itself up to use approximately 99 percent less energy than it has in the past.
As it stands, very few digital currencies in the past have met the criteria to be classified as “financial products,” according to a statement from ASIC. The organization is also saying it’s looking to impose stricter regulation after a huge wave of digital asset investors jumped into the mix in 2020 and brought digital currency trading to a mainstream level.
The ASIC executive director Greg Yanco announced in an interview:
We’re not going to be the cheerleaders for crypto assets.
All coins that are not considered financial products in Australia would have to be delisted for Australian trades on exchanges unless they agree to comply to the state’s new rules. They would also need to obtain specific licenses to show that they hold solid capital should things begin to go haywire as they’ve done this year. Yanco further stated:
Could it be only those people that are willing to take extreme risks, extreme risk on highly volatile products without any underlying asset, where the custody arrangements may not be, you know, maybe at risk or unusual… Until I would say, even the last year, when we were doing our business planning, crypto was not the big priority. We’re seeing products that are mimicking financial products out there because there seems to be some crypto twist. They seem designed to avoid regulation. We’ve seen that and you will have seen that with similar products overseas, people have lost a lot of money on them.
A Lot of Australians Hold Digital Currencies
A new survey suggests approximately 44 percent of traders in Australia hold digital assets as part of their portfolios. Yanco mentioned:
If people are trading shares, suddenly they’re being offered crypto, and they’re beginning to think that they’re maybe not any riskier than share trading… There are so many of these things, we’re probably not going to get to all of them, but we’ve got a couple that we’re looking at [very] closely, and if we need to take enforcement action, we will. We’re technology agnostic, and we’re looking at these things right now because it’s not just as straightforward as one thing. Once you start pooling assets together, it depends on how it’s done.