- ASIC releases draft guidelines clarifying digital asset applications under the Corporations Act 2001.
- The new ASIC framework aims to enhance compliance and consumer protection for digital asset services.
The Australian Securities and Investments Commission (ASIC) has issued draft recommendations aimed at clarifying how the Corporations Act 2001 applies to digital assets.
By matching these new technologies with current legislation, this regulatory drive aims to solve the increasing complexity of financial services connected to digital assets. ASIC wants to simplify compliance procedures by doing this so that consumer safety stays a top priority.
JUST IN: AUSTRALIA’S FINANCIAL WATCHDOG, ASIC, SEEKS FEEDBACK ON NEW DIGITAL ASSET GUIDANCE; CHANGES AIM TO CLARIFY CORPORATIONS ACT 2001 APPLICATIONS TO DIGITAL ASSETS
— BSCN Headlines (@BSCNheadlines) December 4, 2024
ASIC Encourages Licensing and Stakeholder Engagement for Digital Asset Services
The suggested policies advise companies providing financial services connected to digital assets to apply for an Australian Financial Services Licence (AFSL). ASIC is offering a grace period when businesses going through the application procedure will be free from legal action, therefore easing the change.
However, the regulator expects companies that choose not to apply to explain their decision, demonstrating their commitment to maintaining close control. Moreover, the rules suggest that some businesses produce audited prospectuses that show a change toward handling crypto exchanges like traditional financial markets.
Regarding these ideas, Australia’s digital asset sector has responded somewhat differently. While some business leaders are concerned about potential broad consequences, others have acknowledged the importance of communicating with authorities.
For example, the strict licensing criteria and the expectation of audited disclosures can cause business consolidation, in which case smaller players could find it difficult to satisfy the higher standards.
Still, ASIC is adamant about improving the framework based on stakeholder comments, and a final version of the rules is due by mid-2025. Public responses have a deadline of February 28, 2024.
Part of Australia’s larger plan to strike a mix between innovation and consumer protection is this legislative endeavor. Building trust and promoting responsible development through a clear legal framework for digital assets is crucial as they continue to gain momentum.
The activities of ASIC also mirror a global trend as nations struggle with how best to control the fast-changing crypto space.
On the other hand, CNF previously noted XRP cited in a government study by the Australian Tax Office. This acknowledgment emphasizes XRP’s rising acceptance, therefore indicating a positive future for the cryptocurrency.
