Australian Authorities have Published New Requirements for Cryptocurrency Companies

On May 30, the Australian Securities and Investment Commission (ASIC) published a list of new requirements for cryptocurrency companies that hold the initial coin offering (ICO) and operate in the digital asset market.

The document contains the following rules:

  • If a blockchain startup issues tokens that meet the definition of a “financial product” (i.e., are a security or are entitled to receive dividends from investments), then the company is obliged to obtain a license for the provision of financial services;
  • crypto wallets must have permission to provide services for the storage of digital assets;
  • the activity of miners of virtual currencies that process transactions in tokens with the status of “financial product” is regulated by the law on corporations, because they act as an intermediary between the company and the consumer;
  • cryptocurrency exchanges need to get a license to work in the Australian market;
  • payment services and merchants that accept payment in virtual currencies must have a license on providing financial services.

Commissioner John Price said that foreign enterprises that serve citizens of the country are required to comply with Australian law. ICO projects from foreign blockchain startups that fall into the category of financial products must receive a license in the same way as local companies do.

ASIC decided to tighten crypto industry requirements to protect consumer rights and preserve the integrity of the Australian financial market. Members of the Commission drew attention to a large number of cases of fraud in the ICO area and therefore decided to protect the population from possible monetary losses. The system of licensing blockchain enterprises will reduce investment risks and increase the level of public confidence in the crypto industry.

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