On Monday, Treasury released it’s Regulating Digital Asset Platforms Proposal Paper (Paper) (available here).
The Paper details the Government’s intention to regulate digital asset platforms and associated intermediaries, by relying on Australia’s existing financial services framework, and introducing a new type of financial product – a ‘digital asset facility’.
If the Government passes legislation as described in the Paper, digital assets (e.g. crypto-assets) would fall within the definition of a financial product, meaning platform providers and other intermediaries which provide services (which amount to a financial service) would be required to:
- apply for and maintain an Australian financial services license (AFSL);
- comply with most of the current obligations of an AFSL holder; and
- comply with new obligations, and meet minimum standards, which are relevant to the specific services being offered.
Understanding how the new regime may apply to your business is critical for ensuring you are able continue operating without inviting any unnecessary enforcement action from regulators. Once within the financial services framework, ASIC will have the ability to restrict your business from operating and to impose substantial penalties where there is non-compliance.
Our team are financial service specialists, who have extensive experience advising financial service providers around Australia on how to apply for an AFSL and how to continually meet their obligations. If you would like specialised advise on how any changes to the law may impact you and your business, please contact us.
This article was written by Michael Anastas, Partner, and Jordan Donaldson, Solicitor.
