Crypto-Exchanges

Australia ramps up regulation for crypto exchanges amid global push for safety

Australia is now working their way through Cryptocurrency Exchanges to mitigate the risk involved in this field. They are taking precautionary measures to regulate the cryptocurrency exchanges and making it mandatory for them to hold a financial-services license issued by the Australian Securities and Investments Commission (ASIC).

According to them, cryptocurrency platforms holding more than A$5 million, which is equal to 3.2 million US dollars, will be needing a permit from ASIC. Not only that, investors and traders who hold digital assets worth more than A$1500 in their wallet will also have to obtain a permit from ASIC.

Australian regulators are seen crafting their own rules inspired by Canada, UK, Singapore regulatory frameworks. The rules for the cryptocurrency and digital asset industry will compel the exchanges to follow specific guidelines related to how cryptocurrencies are stored and how transactions involving these assets are conducted.

The worldwide initiative to establish regulation for cryptocurrencies led to a significant loss of $1.5 trillion in the total market value of cryptocurrencies. During this time, various fraudsters and scam practices got exposed within the industry. The downturn also led to the collapse of Sam Bankman-Fried's FTX exchange.

This series of events has forced the governments around the world to take action to bolster security. Whereas a few countries are getting strict with their regulation, Singapore is restricting retail investors to participate in crypto trading and focusing on blockchain technology applications.

The Australian government is taking a transparent approach where they are seeking experts' opinion and feedback from the general public regarding the regulation. Considering various perspectives and concerns they will draft the actual legislation for the cryptocurrency industry. People are open to submit their feedback up to the date of December 1. After the regulations are established, crypto exchanges will have a 12 months grace period to ensure that they are fully compliant with the rules.

Australian banks have recently limited access to cryptocurrency platforms for the prevalent fraud and scams. ASIC has also been investigating Binance Australia's now-defunct local derivatives business.

Joseph Longo, the chairman of ASIC emphasized the need for crypto to be held to the same high standards as other financial sectors. Likewise, Brad Jones, an assistant governor at the Reserve Bank of Australia has discussed a project which explores how different forms of digital money and infrastructure can support the development of tokenized asset markets and lead to significant cost savings for the local financial markets.