News Regulation

Australia will take a new approach when regulating crypto exchanges and tighten scrutiny of ICOs

The Australian Securities and Investments Commission (ASIC) has indicated it will take a new approach when regulating cryptocurrency exchanges, as well as tighten scrutiny of initial coin offerings (ICOs).

According to its corporate plan for 2018–2022, released Friday, ASIC will continue “monitoring threats of harm from emerging products” such as ICOs and cryptocurrencies.

Further, for 2018 and 2019, ASIC said it is developing a new framework that will apply “the principles for regulating market infrastructure providers to crypto exchanges” and will intervene where “there is poor behavior and potential harm to consumers and investors.”

The ASIC website states that its current market infrastructure principals include a licensing scheme, via which it seeks to supervise financial market operators, settlement facilities, derivative trading and market participants.

The planned framework follows cross-department efforts the ASIC has been taking to implement supervisory approaches such as dispatching staff onsite in financial institutions related to emerging tech including cryptocurrency.

Crypto exchanges in Australia are currently required to comply with know-your-customer and anti-money laundering standards enforced by Austrac, the country’s financial intelligence agency.

Last year ASIC also published guidelines for businesses wishing to conduct ICOs.