Australia Toughens Crypto Stance: $16.5M Penalties Loom

Australia's Crypto Crackdown: Hefty Fines Proposed for Non-Compliance

Australia is moving towards stricter regulation of the cryptocurrency market, with proposed rules including significant financial penalties for exchanges that fail to comply.

Key Takeaways:

• Crypto exchanges in Australia will likely need a financial services license.
• Non-compliant platforms could face fines up to $16.5 million or 10% of annual turnover.
• The industry is largely welcoming the move towards greater regulatory clarity.

Diving Deeper into the Proposed Regulations

The new regulatory framework aims to bring crypto exchanges under the existing Corporations Act, categorizing them as "digital asset platforms" and "tokenized custody platforms." Providers will need to secure an Australian financial services license and demonstrate they operate fairly, honestly, and efficiently. Misleading conduct and unfair contracts will be banned, and greater transparency will be required for consumers.

Severe sanctions are proposed for non-compliance. Platforms could face fines of up to $16.5 million or 10% of their annual turnover, whichever is higher. Smaller operators with limited customer holdings or transaction volumes may be exempt.

Assistant Treasurer Daniel Mulino stated the reforms are intended to eliminate bad actors while supporting legitimate businesses, fostering both certainty for businesses and confidence for consumers. Public consultation on the exposure draft will continue until October 24th.

Industry Responds Positively

Major players in the crypto space are generally supportive of the regulatory changes. Coinbase, for example, believes the bill is a "meaningful step" towards increasing trust and promoting growth. Other industry figures believe clearer regulations will accelerate mainstream adoption and attract institutional investment.

Stablecoin News

In related news, the Australian Securities and Investments Commission (ASIC) is considering expanding exemptions for intermediaries dealing in stablecoins, specifically the AUDF issued by Forte Securities Australia.