Australia Aims to Regulate Crypto Start-ups with Mandatory Financial Services Licences

cryptonews.com:

Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

Australia is set to introduce new regulations requiring the crypto industry to obtain financial services licenses under the Corporations Act.

On Monday, Australian Securities and Investments Commission commissioner Alan Kirkland said at an AFR Digital Assets Summit that many crypto-asset firms in Australia will need to be licensed. He stated that ASIC considers several crypto assets as financial products under existing laws.

ASIC’s regulatory framework focuses on “financial products,” which involve financial investments, risk management, or non-cash transactions. However, certain aspects of crypto don’t entirely align with this model. This creates uncertainty about whether specific crypto structures require licensing.

Kirkland confirmed to Cryptonews that ASIC will release new draft guidance soon, and plans to invite industry feedback on these updates.

“Millions of Australians now hold crypto-asset investments and ASIC wants to make sure they have access to important consumer protections provided by the current regulatory regime” he said.

Many crypto developers have not obtained Australian Financial Services Licenses (AFSLs), following legal advice. This decision is based on the belief that their investment products don’t fall under the purview of current laws, AFR reported.

To address that, ASIC plans to update guidance by November. This will clarify the classification and treatment of specific crypto tokens representing digital ownership rights and related products.

Further, Kirkland noted ASIC’s concern over potential consumer harm and market misconduct. He stated that licensing will help reduce