Australia’s Financial Watchdog Expands Team to Better Regulate Crypto
September 21, 2022
Australian Securities and Investments Commission (ASIC) increased the size of its crypto team, The Guardian reports, after the popular blockchain shifted from a proof-of-work (PoW) to a proof-of-stake (PoS) system.
The change has prompted U.S. Security and Exchange Commission Chairman Gary Gensler to state that PoS-based tokens could be classified as securities.
Ethereum is under renewed scrutiny following last week’s merge event, as the ASIC looks set to decide on whether the market’s second-largest cryptocurrency is subject to its oversight.
Should ASIC decide to bring PoS tokens like Ethereum, Cardano, and Solana under its remit, crypto exchanges could be forced to either delist them or start complying with more stringent regulatory requirements.
This would include applying for financial services licenses and showing that these platforms also hold significant liquidity in reserve.
Such a move might force some crypto firms to adjust their operating models, as even Tether, the market’s largest stablecoin, has been mired in controversy over its alleged failure to hold enough dollar reserves to back its stablecoin.
While the regulator hasn’t yet issued a final decision, its executive director for markets, Greg Yanco, told The Guardian that ASIC will not be a “cheerleader for crypto assets.”
Crypto in Australia
Research carried out by SEC Newgate for ASIC last November showed that 44% of retail investors in Australia reported holding crypto, and only 20% of them viewed crypto as high-risk.
In response, ASIC chair Joe Longo said the regulator was “concerned that there are limited protections for crypto-asset investments given they have become increasingly mainstream and are heavily advertised and promoted. There is a strong case for regulation of crypto-assets to better protect investors.”
Yanco further said that crypto had not been a big priority for the regulator until last year.
But as the crypto downturn took hold and wiped out investors’ money around the globe early this year, ASIC expanded its team, making crypto one of its “core strategic projects.”
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