Australian Securities Watchdog Prepares to Mitigate Potential Harm of Cryptocurrencies and ICOs

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Australian Securities Watchdog Prepares to Mitigate Potential Harm of Cryptocurrencies and ICOs

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The Australian Securities and Investments Commission (ASIC), as the nation’s chief securities regulator, has recently released its corporate plan 2018-2022 to focus on monitoring the potential dangers from emerging technologies and services such as cryptocurrencies and ICOs.

Future Plans

The ASIC will be launching a project to examine and study the usage and popularity of cryptocurrencies across various industries. In addition, regarding cryptocurrency exchanges, the regulator said it was preparing a policy that would bring them under the same level of scrutiny that traditional stock exchanges and financial market operators are also subject to, by “applying the principles for regulating market infrastructure providers to crypto exchanges.”

Presently, domestic cryptocurrency exchanges fall under the regulation of the country’s financial intelligence agency and watchdog, the Australian Transactions and Reporting Analysis Center (AUSTRAC).

These regulations have been in effect since April 2018. However, AUSTRAC has been monitoring domestic cryptocurrency exchanges since December 2017. Exchange operators were obligated to enroll with AUSTRAC’s ‘Digital Currency Exchange Register’ whilst complying with anti-money laundering (AML), counter-terrorism financing (CTF) and know-your-customer (KYC) rules.

At the time, this was considered to be a skeptical move from Australia, but it actually generated a positive force behind cryptocurrency acceptance, knowledge and adoption in Australia by creating ‘sustainable, non-restrictive regulations’.

The ASIC report writes: “We will continue to focus on monitoring 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.”

Despite a May 2018 report from the Australian Competition and Consumer Commission (ACCC) that detailed significant consumer losses to cryptocurrency scams in 2017, Australia managed to bounce back in a very positive way.

Developments Down-Under

Australia has been a significant point of interest for the crypto or blockchain industry and community for quite some time. After the regulations set up in April, Australia has adapted with an open-minded approach to real-world cryptocurrency and blockchain applications.

With regards to infrastructure, an Australian tech firm partnered with an energy provider to create a dedicated power station for blockchain operators, with the hopes of creating a blockchain “Silicon Valley”.

In March, the Australian Tax Office (ATO) began looking to the public for guidance on how to legislate cryptocurrency taxes. As time moved forward, the ATO moved forward with its crypto-tax plans by coming up with a 100 point check system. In July, crypto-classifications and taxation rules were further clarified.

Most recently, the Australian federal agency partnered with IBM to create a national blockchain for the use of smart legal contracts, which allows domestic companies to utilize the network for digital contracts.

Blockchain technologies in Australia have also managed to find their way into sustainable sugar projects, as well as the Commonwealth Bank of Australia’s recent project that successfully tracked the shipment of 17 tons of almonds using blockchain.

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