Australia has revealed a comprehensive bill to regulate digital currency platforms within the country, a step aimed at enhancing investor protection and ensuring transparency in this rapidly growing sector. The bill mandates that digital asset platforms obtain special licenses, with penalties that could reach 10% of the total annual revenues of violating companies.
According to a statement from the Australian Treasury, the new law will subject cryptocurrency exchanges and custody service providers to corporate law, forcing them to adhere to standards of financial conduct, including acting fairly and honestly and avoiding misleading practices. Non-compliant companies are expected to face fines of up to 16.5 million Australian dollars or the equivalent of 10.9 million U.S. dollars.
This legislation is part of Australia’s efforts to align its laws with international standards, as the Treasury noted its compatibility with the European MiCA law and the Payment Services Act in Singapore, in addition to the OECD framework for tax disclosure on digital assets.
The new law also enforces the segregation of client assets from corporate assets, enhances cybersecurity measures, ensures clear disclosure of risks, and has effective mechanisms for dispute resolution. Through these regulations, Australia aims to address the issue of banking service cancellations by cooperating with local banks to ensure that cryptocurrency companies continue to access financial services.
Despite the strict regulations, the response from the cryptocurrency sector has been positive. John O’Loghlen, head of Coinbase in Australia, welcomed this move, considering that clear regulation will aid in the sector's growth and enhance its global competitiveness. Local Kraken manager Jonathan Miller described the draft as a product of extensive consultations with the government.
Consultations are expected to continue until next October, with final legislation to be issued in 2025 and a transition period of 12 months. Analysts believe that Australia's success in implementing this law will make it one of the leading countries in the Asia-Pacific region in terms of cryptocurrency regulation, providing a safer investment environment for investors.
