Australian consumer group calls for better cryptocurrency regulation due to ‘lagging laws’

Australian consumer advocacy group CHOICE has called on the federal government to provide better protections for crypto investors while submitting a proposed regulatory framework for cryptocurrency exchanges operating in the country.

The regulatory framework was submitted on the basis of a consultation with the Federal Ministry of Finance Paper For “Crypto Asset Secondary Service Providers” (CASSPs), defined as companies that provide custodial crypto wallet and exchange services. Select a comment:

“As it stands, enforceable protections in an unregulated cryptocurrency market are somewhere between negligible and non-existent.”

Outlining four main areas in its framework, the group calls for a single definition of cryptocurrencies for better regulation, licenses exchanges under current financial licensing, and requires them to comply with consumer protection laws to prohibit misleading sex ads, etc.

Finally, CHOICE said that cryptocurrency exchanges need to have measures in place to prevent fraudulent payments and reimburse customers when they occur.

The country’s chief financial services regulator, the Australian Securities and Investments Commission (ASIC), has previously warned that cryptocurrencies are not considered financial products. Commenting on the current regulations, Patrick Veyret, senior policy advisor at CHOICE, said:

“The crypto market is booming, but our laws are lagging behind and more Australians are buying crypto assets like bitcoin and ether without adequate consumer protection.”

In some cases, “people have lost all their savings and cannot get their money back,” Veyret added, citing TerraUSD has fallen recently (UST) as “a clear example of extreme volatility in this unregulated market”.

According to ongoing polls Only about 1 in 10 Australians in the survey conducted by CHOICE have bought cryptocurrencies such as Bitcoin (bitcoin) or Ethereum (Ethereum) Over the past year, 71% of those who said they were interested in the crypto market did not buy due to fears of price volatility and scams.

Another survey of 1,034 Australians conducted in March and April revealed that more than half of respondents did not know whether trading cryptocurrencies came with consumer protections that apply to the stock market, CHOICE reports. About the same number (50%) believe that such consumer protections should be in place for crypto transactions.

related: Australia plans to create crypto competitive advantage in 12 steps

As Cointelegraph reported in August 2021, the first six months of the year Investment scams in Australia Crypto scams cost investors more than $50 million and net bad actors more than $25 million, accounting for more than half of reported losses.

A new report by CHOICE in March found that the main competition regulator, the Australian Competition and Consumer Commission (ACCC), confirmed nearly 10,500 reports of cryptocurrency scams in 2021, with losses of around $92.6 million for the year.

Despite current lack of regulations, government is taking action against cryptocurrencies, ACCC March Meta Takes to Court for Posting Scam Celebrity Crypto Adsand ACCC has expressed its desire to support the crypto industry But note the challenges of regulating such innovative technologies.

The country’s new leader, the Labour Party, has it lacks a cryptocurrency policy Veyret called on the new government to make regulating cryptocurrencies a top priority:

“The new federal government needs to rein in the unregulated crypto industry as one of its priorities for financial services reform, and Australians expect the same level of consumer protection and regulation of crypto assets as other financial products.”

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