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⁤The Australian Securities and Investments Commission (ASIC) is gearing up to implement new licensing requirements for the crypto industry. The upcoming rules aim to strengthen regulatory oversight and protect investors.&nbsp; 
During a presentation at The Australian Financial Review Crypto and Digital Assets Summit​​​​​, <a href="https://twitter.com/Telo_Official/status/1838136974185578800?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1838136974185578800%7Ctwgr%5Ec16be7eb95a9b4abf34e51b331e9938e437bdc36%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwww.financemagnates.com%2Fcryptocurrency%2Fasic-expands-corporations-act-mandating-financial-licenses-for-crypto-exchanges%2F" rel="nofollow noopener" target="_blank">ASIC </a>commissioner Alan Kirkland revealed these plans as part of a strategy to incorporate the cryptocurrency industry within the current financial regulatory system.&nbsp; 
<h3 class="wp-block-heading" id="span-style-font-weight-400-the-albanese-government-drafts-new-licensing-regulations-for-crypto-exchanges-span">The Albanese government drafts new licensing regulations for crypto exchanges</h3> 
In addition, the Albanese government is drafting new legislation that would require crypto exchanges to obtain financial services licenses and establish custody rules for digital assets, aiming to enhance investor protection for cryptocurrencies like Bitcoin and Ethereum. While an exposure draft was initially planned for release this year, it remains uncertain whether the bill will be presented before the next federal election.&nbsp; 
ASIC commissioner Alan Kirkland emphasized that licensing will extend beyond digital currency exchanges, given that the Australian Securities and Investments Commission (ASIC) views many widely traded crypto assets as financial products.&nbsp; 
Currently, <a href="https://asic.gov.au/about-asic/news-centre/speeches/crypto-and-digital-assets-policy-regulation-and-innovation/#:~:text=As%20you%20will%20be%20aware%2C%20under%20existing%20law%2C%20ASIC%20only,related%20to%20companies%20also%20apply." rel="nofollow noopener" target="_blank">ASIC’s regulatory </a>framework is based on a definition of “financial products,” which involves facilities for financial investment, risk management, or non-cash payments. However, some crypto aspects don’t fit neatly within this framework, raising questions about licensing requirements for certain structures.&nbsp; 
Many crypto developers have opted not to pursue Australian Financial Services Licenses (AFSLs), believing their products fall outside current legal definitions. ASIC has initiated two significant court cases against unlicensed promoters, which are still under appeal.&nbsp; 
ASIC plans to release an update to “Information Paper 225” by November, aiming to clarify the treatment of specific crypto tokensᅳrepresenting digital ownership rightsᅳand related products.&nbsp; 
Kirkland stated: 
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"> 
 ASIC’s message is clear: a significant number of crypto-asset firms in Australia will likely need a license under existing law, as many widely traded crypto assets are considered financial products. <cite>~ Alan Kirkland </cite>
</blockquote> 
<h3 class="wp-block-heading" id="span-style-font-weight-400-asic-strengthens-consumer-protections-for-australian-crypto-investors-amid-legal-challenges-span">ASIC strengthens consumer protections for Australian crypto investors amid legal challenges</h3> 
With millions of Australians holding crypto investments, ASIC aims to ensure they benefit from vital consumer protections under the current regulatory framework.&nbsp; 
Earlier this year, the Federal Court ruled that Block Earner, which offered fixed-yield crypto products, should have registered as a managed investment scheme. However, the court opted not to impose penalties, citing the company’s honest conduct. ASIC is appealing this decision.&nbsp; 
Similarly, ASIC is contesting a March ruling that found Finder Wallet did not violate financial services regulations and did not require a license. ASIC argued that the product, allowing users to convert Australian dollars into cryptocurrency, constituted a “debenture” under corporate law.&nbsp; 
Globally, regulators, including the US Securities and Exchange Commission (SEC), are also taking legal action against crypto firms amid uncertainty regarding product classification under existing laws. The SEC has sued <a href="https://www.sec.gov/newsroom/press-releases/2023-102" rel="nofollow noopener" target="_blank">Coinbase</a> for offering unregistered securities and delayed Bitcoin ETF approvals before permitting listings in January.&nbsp; 
Lawyer Liam Hennessy noted that ASIC’s updated guidance should clarify key concepts, helping to prevent unintentional regulatory breaches. He urged ASIC to consider the crypto information paper as a dynamic document that evolves as new models arise.&nbsp;

Australia’s ASIC plans new crypto licensing requirements to enhance oversight

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