The Australian government is taking new measures and implementing strategies to counter crypto criminals after the scams escalated by 162% in 2022. The crypto regulator’s team in Australia with the support of the Australian government is taking a multi-stage initiative with a plan to suppress crypto and ensure the crypto firms release proper disclosure.
A New Strategy to Protect Consumers From Scammers in the Emerging Asset Class
The unstable business structure of companies handling crypto assets has exposed the consumers. While the earlier government participated in the industry superficially, they did not future-proof the assets to protect consumers and guide the new and emerging asset class. Therefore, after the FTX collapse situation that shook the world in 2022, the Australian government came up with a new strategy.
On 2nd February, Assistant treasurer Stephen Jones, and treasurer Jim Chalmers stated that the new strategy is introduced to ensure that the regulation of crypto assets will protect the consumers, and their economic situation so that they can enjoy the benefits of new digital services, and products.
The methodical “multi-stage approach” consists of three major elements. These are:
- Strengthening Consumer Safety
Since cryptocurrencies do not fall under the financial services regulatory framework, the government is reforming the custody and licensing of crypto assets. A set of operational standards and obligations will be set for the crypto asset service companies to ensure the safety of consumer assets.
- Boosting enforcement
The regulators are focusing on crypto asset providers to ensure that they meet their guidelines to protect Aussie consumers. Legal actions will be taken in case of illegal financial services. ACCC (Australian Competition and Consumer Commission) is also actively putting up efforts to prevent cryptocurrency scams.
- Authorizing a framework for reforms
While the government has taken immediate measures for consumer protection, more work is required to understand the opportunities and risks that cryptocurrencies might propose in the future. This started with the token mapping exercise of the treasury.
The Australian government is dedicated to working meticulously with the industry, regulators, and advocacy groups.
Also Read: The Top Blockchain Trends Of 2023
ACCC to Receive New Tools to protect Consumers from Crypto Scams
The Australian government is making a series of changes, that start by adding more members to the digital asset team of ASIC (Australian Securities & Investments Commission) and upgrading the enforcement evaluation.
Jones and Chalmers said ASIC is planning to focus on the disclosure of crypto assets, and service providers to protect consumers. The government is also planning to provide new tools and equipment to the ACCC to keep consumers safe from cryptocurrency scammers. ACCC shared that crypto payment scam loss amounted to $221 million in 2022.
Stephen Jones, the Assistant treasurer of the Australian government shared a tweet sharing the news today early morning stating “That is why we are taking action on crypto.”
The new tool is a type of real-time data-sharing tool that will help the ACCC to locate and prevent potential crypto scams. The safety of consumers will be strengthened after a framework is finalized to reform the custody and licensing of cryptocurrencies.
It will ensure that the consumers are safe from unnecessary business collapses or the misuse of consumer assets by the crypto exchanges or service providers. The framework will however not start until the mid of 2023 and will take time before being a part of the legislation.
How Can a Regulatory Framework Help Crypto Asset Holders in Australia?
Over one million Australians which consists 5% of the country’s population hold cryptocurrencies. While the number of people adopting the new asset class is ever-increasing, only 20% of them are seemed to be aware of the risks associated with it, and their vulnerability to potential scams, hacks, and bankruptcy.
The 2022 events have revealed that even the most popular and trusted crypto exchange platforms like FTX and Celsius and other crypto investment companies such as Three-Arrow Capital (3AC) are risky and might collapse taking down the crypto holders and customers who trusted in them.
This has led the governments and the regulators of the digital asset markets around the world to take strong action and come up with new strategies to protect consumer assets. The treasurer of the Australian government added that “they are planning methodically and swiftly to ensure that consumers are protected and innovation can happen.”
The Australian treasury released the token mapping consultation paper on Feb 2nd, to determine the elements of the crypto ecosystem that will be regulated. The FTX collapse impacted more than 30,000 Australians and 132 companies based in Australia. The event sped up the multi-stage approach strategy.
The regulations of crypto assets have been a primary factor in several countries. With the increasing number of scams and crimes in the industry, several countries are adopting strategic measures to counter criminals. As predicted, 2023 is going to be an eventful year in terms of crypto regulations, and policies.