Australian financial regulator ASIC to develop new rules for cryptocurrency exchanges

The Australian Securities and Investments Commission (ASIC) has revealed its plans to develop new approach for regulating cryptocurrency exchanges and increase monitoring of initial coin offerings (ICOs) in order to protect investors.

The regulator last week released its corporate plan for 2018-2022 in which it has outlined its key focus areas including crypto-assets and ICOs. It said that though this sector still represents a very small portion of global assets, the fast growth is resulting in increased regulatory monitoring.

For 2018-19, the ASIC said that it will continue to monitor threats of harm from emerging products (e.g. ICOs and cryptocurrencies), 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.

On these lines, it said that it will develop its “approach for applying the principles for regulating market infrastructure providers to crypto exchanges,” and monitor “emerging products, such as ICOs, and intervening where there is poor behaviour and potential harm to consumers and investors.”

The ASIC also said that it has formed internal cross-team working groups to better coordinate its work on implementing new supervisory approaches. This includes placing its officials onsite in major financial institutions related to cryptocurrencies, corporate governance, and other areas.

Previously, the regulator had released an information sheet that gives guidance about the potential application of the Corporations Act 2001 to entities that consider raising funds through an ICO and to other cryptocurrency or digital token businesses.

Earlier in April, the Australian Transaction Reports and Analysis Centre (AUSTRAC) rolled out new Anti-Money Laundering and Counter Terrorism Financing (AML/CTF) laws for digital currency exchange providers operating in the country.