Australian Regulators To Increase Monitoring Of Digital Asset Products And ICOs

ASIC says that crypto assets require “increased regulatory monitoring.”

This week, the Australian Securities and Investments Commission (ASIC) released its corporate plan for 2018-2022, which outlined its intent to increase scrutiny of cryptocurrency exchanges and initial coin offerings (ICOs).

ASIC, which regulates and monitors Australia’s financial industry, claimed that, although crypto assets represent a very small portion of global assets, their growth in popularity warrants “increased regulatory monitoring.”

According to the corporate plan, ASIC claims it will continue to examine products related to cryptocurrency and ICOs that pose potential threats to investors because of the “misconduct that is facilitated by or through digital and/or cyber-based mechanisms.”

ASIC plans to fight this kind of misconduct in 2018 and 2019 by “applying the principles for regulating market infrastructure providers to crypto exchanges,” and monitoring “emerging products, such as ICOs, and intervening where there is poor behavior and potential harm to consumers and investors.”

Cryptocurrency exchanges currently operating in Australia are required to adhere to anti-money laundering, counter-terrorism financing, and know-your-customer regulations implemented in April by the Australian TransactionReports and Analysis Centre (AUSTRAC), the country’s financial intelligence agency.

This announcement seems to be the culmination of many debates surrounding the regulation of digital currencies in Australia. In April, ASIC was looking into applying Australian regulations to foreign ICOs that accept funds from Australian investors. By contrast, in October 2017 ETHNews reported that Tony Richards, head of the Payments Policy Department for the Reserve Bank of Australia, stated that he did not believe cryptocurrencies raised any pressing regulatory concerns. Just a few months earlier, the Australian Parliament posted a draft outlining anti-money laundering and counter-terrorism financing regulations on its website.

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G20 Watchdog Releases Framework for ‘Vigilant’ Crypto Monitoring

The Financial Stability Board (FSB), an organization focused on analyzing and making recommendations to the G20 on global financial systems, has presented a framework for monitoring cryptocurrency assets.

It notably lists several metrics that the FSB will use to keep an eye on the developing crypto markets and “should help to identify and mitigate risks to consumer and investor protection, market integrity, and potentially to financial stability.”

The standardized framework was published along with a report on Monday and has been submitted to the G20 nations’ financial ministers and central bank governors.

According to the document, the FSB’s monitoring efforts will focus on crypto assets’ price volatility, the size and growth of initial coin offerings (ICOs), crypto’s wider use in payments and institutional exposure, as well as the market’s volatility when compared to gold, currencies and equities.

The FSB – which is led by Bank of England governor Mark Carney – will also periodically compile qualitative reports to gather intelligence for market confidence, the report says.

The organization further sets out the reasoning behind the framework, saying:

“While the FSB believes that crypto-assets do not pose a material risk to global financial stability at this time it recognizes the need for vigilant monitoring in light of the speed of market developments.”

The report indicated that, apart from the FSB, other international regulatory organizations too are stepping up their efforts in monitoring specific areas of the cryptocurrency industry.

For instance, International Organization of Securities Commissions, a global regulatory body made of securities watchdogs, is developing its own framework in an effort to help member countries better analyze the impacts of domestic and foreign ICOs on investors.

Meanwhile, the Basel Committee on Banking Supervision (BCBS) is gathering data on its member banks’ direct and indirect exposure to cryptocurrency in an effort to quantify the potential impact of the technology.

The FSB report comes as the result of the G20 meeting in March this year, at which there were calls for global regulation of cryptocurrencies. As previously reported by CoinDesk, member countries agreed at the time that initial recommendations were required over what data should be used to monitor the crypto space, and set July as a deadline.

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Author: Wolfie Zhao
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