Australian Treasury

Australia bolsters crypto watchdogs in ‘multi-stage’ plan to fight scams

The new measures from the Australian government come as cryptocurrency scams skyrocketed 162% to $221 million in 2022.

The Australian government is bolstering its market regulator’s digital asset team as part of a “multi-stage approach” aimed at clamping down on crypto and ensuring proper risk disclosures from crypto firms.

A Feb. 2 joint statement by Australian Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones explained that the new measures are aimed at protecting consumers dealing with cryptocurrency.

The treasurers said the multi-stage approach would involve three elements, including strengthening enforcement, bolstering consumer protection, and establishing a framework for its token mapping reform.

One of the main changes will be an increase in the size of the Australian Securities & Investments Commission (ASIC)’s digital assets team and “upping enforcement measures.”

Chalmers and Jones said that ASIC would focus on ensuring that the risks to consumers from crypto products and service providers are appropriately disclosed.

Cointelegraph reached out to ASIC to find out how many additional positions will be filled but did not receive an immediate response.

Meanwhile, the government is set to give new tools to the Australian Competition and Consumer Commission (ACCC), the country’s competition watchdog, to protect consumers from crypto-related scams. It noted scam losses involving crypto payments totaled $221 million in 2022.

The new tool will come in the form of a real-time data-sharing tool that the ACCC will use to identify and prevent crypto scams.

Consumer protection will also be bolstered when a framework is finalized to regulate the licensing and custody of digital assets to “ensure consumers are protected from avoidable business failures or from the misuse of their assets by service providers.”

However, this framework will not begin until mid-2023, and will likely take considerable time before being implemented into legislation.

Related: An overview of the cryptocurrency regulations in Australia

“The previous government dabbled in crypto policy but never took the time to future‑proof our regulatory frameworks to protect consumers and guide this new and emerging class of assets,” the treasurers said, adding:

We are acting swiftly and methodically to ensure that consumers are adequately protected and true innovation can flourish.”

The Australian Treasury released its token mapping consultation paper on Feb. 2, which attempts to determine which elements of the cryptocurrency ecosystem will be regulated and to what extent.

The multi-stage approach plan was fast-tracked after the catastrophic collapse of FTX in November, which impacted over 30,000 Aussies and 132 Australian-based companies.

Australia bolsters crypto watchdogs in ”multi-stage’ plan to fight scams

The new measures from the Australian government come as cryptocurrency scams skyrocketed 162% to $221 million in 2022.

The Australian government is bolstering its market regulator’s digital asset team as part of a “multi-stage approach” aimed at clamping down on crypto and ensuring proper risk disclosures from crypto firms.

A Feb. 2 joint statement by Australian Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones explained that the new measures are aimed at protecting consumers dealing with cryptocurrency.

The treasurers said the multi-stage approach would involve three elements, including strengthening enforcement, bolstering consumer protection, and establishing a framework for its token mapping reform.

One of the main changes will be an increase in the size of the Australian Securities & Investments Commission (ASIC)’s digital assets team and “upping enforcement measures.”

Chalmers and Jones said ASIC would focus on ensuring risks to consumers by crypto products and service providers are appropriately disclosed.

Cointelegraph reached out to ASIC to find out how many additional positions will be filled but did not receive an immediate response.

Meanwhile, the government is set to give new tools to the Australian Competition and Consumer Commission (ACCC), the country’s competition watchdog, to protect consumers from crypto-related scams. It noted scam losses through crypto payments totaled $221 million in 2022.

The new tool will come in the form of a real-time data-sharing tool that the ACCC will use to identify and prevent crypto scams.

Consumer protection will also be bolstered when a framework is finalized to regulate the licensing and custody of digital assets to “ensure consumers are protected from avoidable business failures or from the misuse of their assets by service providers.”

This framework will not however begin until mid-2023, and will likely take considerable time before it is implemented into legislation.

Related: An overview of the cryptocurrency regulations in Australia

“The previous government dabbled in crypto policy but never took the time to future‑proof our regulatory frameworks to protect consumers and guide this new and emerging class of assets,” said the treasurers, adding:

We are acting swiftly and methodically to ensure that consumers are adequately protected and true innovation can flourish.”

The Australian Treasury released its token mapping consultation paper on Feb. 2, which attempts to determine which elements of the cryptocurrency ecosystem will be regulated and to what extent.

The multi-stage approach plan was fast-tracked by the catastrophic collapse of FTX in November which impacted over 30,000 Aussies and 132 Australian-based companies.

Australian ‘token mapping’ consultation paper to release in early 2023: Treasurer

The consultation paper will give an insight into how certain crypto assets should be regulated alongside frameworks for company licensing, asset custody and consumer protections under token mapping.

Australian Treasurer Jim Chalmers has revealed that the government will release a consultation paper in early 2023 as part of its token mapping initiative.

The crypto sector has received greater attention from Australian regulatory and enforcement agencies since the FTX implosion, with the government emphasizing the importance of providing greater consumer protection laws as soon as possible.

In a Dec. 14 statement, Chalmers noted that the Anthony Albanese-led government is “taking action to improve the regulation of crypto service providers and ensure additional safeguards for Australians.”

As part of that process, Chalmers revealed the consultation paper will cover how certain crypto assets should be regulated alongside frameworks for company licensing, asset custody and consumer protections under its previously announced token mapping exercise.

“The next steps in the Government’s ongoing ‘token mapping’ work will include the release of a consultation paper in early 2023 to inform what digital assets should be regulated by financial services laws, and the development of appropriate custody and licensing settings to safeguard consumers.”

“Following the release of token mapping, the Government will consult on a custody and licensing framework next year before introducing legislation,” he added.

The latest comments from Chalmers add to a promise from the Treasury in mid-November that it will develop and enact a robust regulatory framework for crypto in 2023.

The focus on crypto is also part of a push to “modernize Australia’s financial system,” with the government set reform regulations on financial market infrastructure — particularly in relation to the Australian Securities Exchange’s clearing system, payments systems and the buy now, pay later sector.

Related: A loophole allowed FTX to secure its Aussie license without full checks: ASIC’s Longo

Australia’s government has been largely pro-crypto but has reiterated the importance of allowing for innovation while keeping the public safe.

On Dec. 8, the Reserve Bank of Australia published a stablecoin-focused report that suggested regulators are “undertaking significant work” figuring out how to safely integrate them into the financial ecosystem.

“Stablecoins have the potential to enhance the efficiency and functionality of a range of payment and other financial services,” the report read.