28 March 2022
The Department of Treasury has begun an inquiry into regulating cryptocurrency exchanges by releasing a consultation paper last week.
The document is seeking industry feedback over the governments’ plan to legislate a licensing process for crypto exchanges via its Digital Services Act.
The key focus areas of the Digital Services Act include custody, exchanges, dealers, DAOs, taxation, and licensing.
The primary purpose of regulation is to reduce consumer risks by developing a minimum standard of conduct.
The Australian Government wants to give clear regulatory certainty about the policy treatments of crypto asset secondary service providers.
There are 11 obligations that the consultation will take into account, including consumers’ assets, financial and capital requirements, technical expertise, protection of private keys and unauthorised access, signing processes, cyber security practises, compensation schemes, and the use of third-party custodians.
Senator Andrew Bragg said that these changes would make Australia one of the only jurisdictions confronting the issues head-on, signalling that we fully appreciate the promise and potential of blockchain technology.
The paper also seeks views on two alternative options. Option 1 regulating crypto assets under the financial services regime or option 2. Self-regulation by the crypto industry.
Responses are being sought until May 27.
The proposed reforms will provide safety and further protection for the Qoin Community as users verge onto public blockchains and exchanges in the coming months.