Government moves to tighten rules for crypto

Tighter regulations on the burgeoning cryptocurrency market will be introduced in an attempt to protect the estimated one million Aussies dabbling in the sector.

Treasurer Jim Chalmers announced a string of measures on Friday, including strengthening enforcement of crypto providers and bolstering consumer protections.

The regulations follow last year’s spectacular collapse of FTX, one of the world’s largest cryptocurrency exchanges, which left thousands of Australian investors out of pocket.

Globally, market watchdogs have been concerned people are entrusting their digital assets to a trading platform and mistakenly think they have the same protections as when buying shares online.

Financial Services Minister Stephen Jones said the reform would protect crypto-curious Australians and mitigate risks to the economy.

“(It’s about) protecting consumers, protecting our financial system and cracking down on criminals,” he told ABC TV on Friday.

Under the changes, financial regulator ASIC will increase the size of its cryptocurrency team and work to educate consumers about financial risks, while the government will establish standards for crypto asset providers.

With more than $221 million paid to scams via crypto assets in 2022, the announcement also outlined an increase in anti-scam efforts by the consumer watchdog and the National Anti-Scams Centre which will facilitate real-time data sharing to prevent and disrupt scams.

The federal treasury is also taking comments from the public about the state of crypto management, regulatory gaps and risks. 

ASIC chair Joseph Longo last year warned the promotion of crypto assets through popular social media channels could contribute to their popularity.

“But there continues to be lack of public awareness of their highly volatile, risky and complex nature,” he told a December parliamentary committee.