In an update on how the government intends to make crypto safer for consumers, the Minister for Financial Services, Stephen Jones, has announced that the corporate regulator is increasing the size of its crypto team and upping its enforcement measures.
“The regulator will take legal action where it identifies crypto offerings being marketed without the appropriate credit or financial services licence,” Mr Jones said in a joint statement with Treasurer Jim Chalmers.
The pair also announced the release of a consultation paper as part of the government’s “world first” audit of the crypto sector.
The government first announced its token mapping project in August last year, noting that its aim is to improve the way Australia’s regulatory system manages crypto assets.
The consultation paper released on Friday explores in detail which elements of the crypto ecosystem are sufficiently regulated and which require additional attention.
“This will enable the government and stakeholders to focus on regulatory gaps and ensure that emerging risks are identified and controlled,” Mr Jones and Mr Chalmers said.
The paper clarifies that following the token mapping phase, the government will move towards licensing and custody reforms as the “logical next step” for crypto reforms in Australia.
As part of this next phase, the government intends to release a consultation paper in mid-2023 proposing a licensing and custody framework for crypto asset service providers.
Token mapping a crucial first step
Doing the media rounds on Friday, Mr Jones told ABC’s News Breakfast that token mapping is a crucial first step towards crypto security.
“You can’t regulate what you don’t understand,” Mr Jones said.
“[We’re] ensuring that we have a conversation with the Australian people about which of the cryptocurrencies, the tokens, if you like, that we are going to drag inside the financial services regulation system, which of them have absolutely nothing to do with financial services,” he added.
He also divulged the government’s three key aims ahead of its crypto crackdown.
“We want to ensure that Australians who are investing in or using cryptocurrency can do so safely,” the Minister said.
“We want to ensure that the system is stable and that any problems in the cryptocurrency area doesn’t flow over into other areas of our financial markets,” he continued.
“And, thirdly, we want to ensure that cryptocurrency is not an easy avenue for international criminals to use it to hide their nefarious activities. So, protecting consumers, protecting our financial system and cracking down on criminals”.
