In our report on the world’s lawmakers’ responses to the global rise of the crypto industry, titled ‘Beyond Borders: Mapping the Global Digital Asset Regulatory Landscape’, we examine how crypto regulations are applied in Australia, and provide insights about how the country has positioned itself in the vanguard of APAC’s drive to lead the way in conducting crypto business.
For a quick peek, read on, or get access to the full report here.
The Australian government’s approach to crypto compliance and regulations
The position on crypto industry regulation in Australia has created an attractive option for investors seeking favorable yet safe opportunities within a stable and sensible regime:
The federal government has taken a progressive and balanced approach to integrating crypto asset trading with the traditional economy since 2017, when it first addressed digital currency exchanges (DCEs) in terms of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).
Authorities reached another landmark in October, 2021, when the country’s parliament issued a report which outlined how the crypto industry could be both policed to mitigate money laundering and terrorism financing (ML/TF) risks while raising revenue via taxation, and protected from the killer blow of debanking by the traditional finance sector.
Further progress was made in August, 2022, when the Australian government revealed its plans to ‘token map’ the crypto sector, and position Australia as a leader in the field. The project aims to identify regulatory gaps, initiate a licensing framework, and increase consumer protection, especially concerning third-party custodians of crypto assets.
The following year, the Digital Assets (Market Regulation) Bill 2023 was circulated, and in October, 2023, the government announced its intention to introduce a comprehensive regulatory framework for digital and crypto asset platforms designed to foster innovation while addressing potential risks and protecting consumers.
ASIC & AUSTRAC’s approach to crypto compliance and regulations
Australia’s keen appetite for compliance with the Financial Action Task Force’s (FATF) standards is also reflected in the government’s financial services licensing body and enforcement arms both taking firm but encouraging steps towards the safe and viable development of the crypto industry.
The Australian Securities and Investments Commission (ASIC) requires that entities operating a financial services business in Australia must hold an Australian Financial Services License (AFSL), or be exempt, and provides guidance on regulatory obligations for various crypto participants in its INFO 225 document.
Meanwhile, the Australian Transaction Reports and Analysis Centre (AUSTRAC) requires that digital currency exchange service providers be registered with it, and that they undertake stringent AML/CFT measures. AUSTRAC also vigorously champions AML/CFT best practices for digital currency regulation, and in November, 2023, promoted FATF’s report on global ML/TF risks. Moreover, AUSTRAC has made increased regulatory focus on digital currency exchanges a priority of its 2024 Regulatory Priorities Plan.
Australian crypto compliance and regulation in the future
The federal government’s approach will ensure that platforms operate transparently and responsibly, the risks associated with crypto exchange collapses will be mitigated, and Australians will be better protected from potential scams in the crypto space, which sets the stage for a future where digital assets are integral to economic growth and consumer trust.
