Australia’s financial regulator to increase crypto scrutiny
Last week, the Australian Securities and Investment Commission (ASIC) announced that it was going to increase its focus on the cryptocurrency sector. Specifically, ASIC plans on scrutinizing more closely domestic crypto exchanges and initial coin offerings (ICOs).
In its corporate action plan (in pdf), ASIC asserted, “We will continue to focus on monitoring threats of harm from emerging products (e.g. ICOs and crypto currencies), cyber resilience, the adequate management of technological solutions by firms and markets, and misconduct that is facilitated by or through digital and/or cyber-based mechanisms.”
The action plan spans a period of five years. Over the next two, the financial regulatory body will dedicate resources in particular to ICOs and will intervene “where there is poor behavior and potential harm to consumers and investors.” The agency started that it is “developing our approach for applying the principles for regulating market infrastructure providers to crypto exchanges.”
ASIC indicated that the growth of the blockchain industry is the impetus for the updated policies. It said, “Innovations in blockchain are expected to increase efficiencies in settlements, data reconciliation and other middle- and back-office functions. For example, the Australian Securities Exchange (ASX) is expected to replace its Clearing House Electronic Sub-register System (CHESS) with a [distributed ledger technology] solution by 2021.”
Current regulations in the country require crypto exchanges to comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) guidelines. These requirements are overseen by the Australian Transactions and Reporting Analysis Center, but there have not been specific requirements created for exchanges issued by ASIC. To date, it has only published a guide that contains recommended policies for entities looking to launch an ICO.
The action plan was published at the same time that a technology solutions provider in Australia was forced to answer questions from the ASX. Byte Power Group (BPG) has announced plans for an ICO that it hopes will see it attract $15 million, and those plans have been called into question by the ASX. Most notably, the ASX wanted to know if BPG’s fundraising activities complied with listing rules, and if the company had met all the legal requirements to establish the ICO.
To receive the latest CoinGeek.com news, special discounts on CoinGeek Conferences and other inside information direct to your inbox, please sign up for our mailing list.