- The Australian government is clamping down on crypto scams, which rose 162% to $221 million in 2022.
- The government plans to strengthen enforcement for regulating the licensing and custody of digital assets through a multi-stage approach
- A framework for regulation will be finalized in mid-2023
The Australian government is taking steps to combat the rising number of cryptocurrency scams in the country. In 2022, such scams rose 162% to $221 million, which forced the government to launch a long-term plan. This “multi-stage approach” is aimed at determining risk disclosures from crypto firms and protecting consumers.
The plan consists of three elements: improving enforcement, providing more consumer protection, and building a structure for regulating digital assets. The Australian Securities & Investments Commission (ASIC) will increase the size of its digital assets team. With more personnel in the division, ASIC hopes to “up” its enforcement against malicious attackers. The focus will be on ensuring that the risks associated with crypto products and services are adequately disclosed to consumers.
The government will provide provisions to the Australian Competition and Consumer Commission (ACCC), such as a real-time data-sharing tool for identifying and preventing crypto scams. Once established, the framework will regulate digital assets. This structure is set to begin in mid-2023, although it may take some time before they can apply it to legislation.
Government Steps Up Efforts
The previous administration was criticized for not taking action on crypto regulation. However, the current one is moving quickly to address the issue. The Australian Treasury uploaded a Token mapping consultation paper to the public. It aims to discover the critical areas of the cryptocurrency ecosystem that require regulation and solutions in case of an attack.
The fallout of FTX last November led to Australia’s decision to speed up the multi-stage approach. It affected over 30,000 Australians and 132 Australian-based firms. The treasurers of Australia stated that the previous government never took the time to future-proof regulatory frameworks for the protection of consumers and the guidance of the emerging class of assets represented by cryptocurrencies.
So far, the public is showing positive feedback to the current administration. The government is taking serious action to address the problem of cryptocurrency scams. Through the authorities’ thorough planning, they are increasing cyber security, improving customer defenses, and establishing a dedicated framework. The goal is to ensure that the risks associated with crypto products and services are adequately disclosed to consumers and that they are protected from avoidable business failures or the misuse of their assets by service providers.
2021 as an Eye-Opener for the Country
Two years ago, cryptocurrency swept the world with its consecutive bullish runs since its recovery after the first COVID-19 outbreak. It was also during this time when Australian banks began discussing the ability to provide storage for the citizens’ cryptocurrencies, although the government did not act upon it.
When Anthony Albanese stepped in as Prime Minister of Australia last year, the administration became more aware of crypto actions. Ultimately, banks shunned storing crypto in their vaults for people after some initially wanted to do so, especially after the release of crypto ATMs.
As it was stated in the Token Mapping paper, “In 2021, illicit use of crypto tokens globally was approximately US$14 billion, representing approximately 0.15 percent of total legitimate crypto-asset transactions.8 The largest growth areas for illicit activity were scams and stolen tokens (US$7.8 billion).”
It went on to say how consumers find it hard to identify scams that include crypto assets, and the fast traffic of blockchain makes it hard for regulators to stop the digital thieves.
Today, the new framework can provide more security for crypto transactions for citizens, especially once it goes live within the year.
