ASX custody warning, calls for clear-cut Crypto regulations in Australia

ASX custody warning, calls for clear-cut Crypto regulations in Australia

Cryptocurrency News
July 23, 2021 by Delnia
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During current deliberations within Australia's Senate Select Committee on Financial Regulatory Technology, the Australian Securities Exchange (ASX) has chimed in on the subject of crypto custody. The ASX identified crypto custody on centralized exchanges as a key risk concern for investors in a report to the committee on July 16.
ASX custody warning, calls for clear-cut Crypto regulations in Australia

The ASX has issued some clear-cut Crypto regulations in Australia exchange custody warning and has called for tighter restrictions.

According to the Australia Securities Exchange, crypto investors in the country should know the risks of keeping their coins on exchange platforms.

According to the ASX filing, investors do not have access to their private keys while their assets are domiciled in these platforms. Which is another way of stating “not your keys, not your coins.

Crypto money left on exchange wallets, according to the ASX, is exposed to cybersecurity threats like theft by hackers. In the past, crypto exchange thefts were common, with over $53 billion worth of virtual currency stolen from platforms between 2011 and 2020. You will find complete info about clear-cut Crypto regulations in Australia in this article.

However, better security measures on exchanges have substantially reduced these thefts, but the occasional exchange hack still occurs.

Aside from cybersecurity concerns, ASX’s statement to the Senate committee noted that investors who choose crypto exchange custody risk having their assets handled in a secret or illegal manner.

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The ASX listed clear-cut Crypto regulations in Australia

While emphasizing that cybersecurity concerns are not exclusive to crypto exchanges, the ASX listed solutions including clear-cut Crypto regulations in Australia, adequate asset capitalization, and insurance as quality assurance procedures used by conventional asset custodians.

The ASX requested transparency rules for crypto exchanges and independent assurance methods to better secure assets on their systems in its statement to the committee. The securities exchange also suggested that basic criteria for digital asset custody services be established.

The ASX recommended that such safeguards be incorporated in Australia’s larger cryptocurrency regulatory framework, given the country’s lack of defined crypto rules.

Senator worries that a lack of rules might stifle crypto innovation in Australia

Senator Andrew Bragg of Australia has encouraged authorities to provide clear and comprehensive laws to promote innovation and global competitiveness.

Andrew Bragg, a conservative Australian senator, stated that better crypto-asset laws require if Australia wants clear-cut crypto regulations in Australia and encourage innovation.

The member of the ruling Liberal Party, who is chairing a senate inquiry into Bitcoin and other digital assets, said on Sky News that crypto asset products have already increased. He also stressed that Australia needs a positive business environment and consumer protection to build a growing industry.

They also acknowledged that these things do not exist at the moment and that having a proper legal and regulatory framework can help maintain people’s competitiveness while protecting consumers.

People are utilizing [digital assets], and they need to have a comprehensive assessment of it to determine what kind of policy Australia wants to have if it wants to be a tech powerhouse,” he says.

US financial regulator and Crypto rulemaking

Following the retirement of Brian Brooks, the Office of the Comptroller of the Currency, the US financial regulator will evaluate Cryptocurrency-related rulemaking.

As part of his appearance before the House Financial Services Committee on Wednesday, Michael Hsu, the newly appointed acting Comptroller of the currency, requested a staff review of past OCC rulemaking addressing the crypto sector.

Hsu requested that the OCC evaluate its clear-cut Crypto regulations in Australia’s activities, such as revising the framework for chartering national banks and trust firms, defining crypto custody services as part of the banking industry, and creating an Office of Innovation, in prepared remarks. “But it is noteworthy that they at the OCC have emphasized the need to encourage responsible innovation. I’ve instructed my team to look into these actions,” he said.

Satisfy requirements and clear-cut Crypto regulations in Australia

The incoming Comptroller of the Currency stated that his priority would be to ensure that OCC-supervised banks “run safely and soundly, satisfy the credit requirements of their communities, treat all customers equally, and comply with laws and clear-cut Crypto regulations in Australia.

Bragg is chairing a senate investigation into digital assets, which it announced earlier this week. According to a document released on May 19, the committee will look at cryptocurrency policy in Australia. Also, taking into account the regulatory methods of the US, Canada, the UK, and the EU.

Investors and legal gaps in cryptocurrency in Australia

Failure to enact comprehensive crypto rules. According to the report, may push investment overseas and hurt Australia’s competitive position in the industry:

According to the statement, “the committee will explore possibilities for creating a complete regulatory framework for bitcoin and digital assets.They’d want to know what type of policy and legal clarity need to incentivize private investment in Australian digital assets over overseas investments.

The investigation will focus on the alleged practice of “de-banking,” in which traditional banks stop providing services to fintech companies that compete with legacy financial institutions. According to Bragg, the apparent frequency of de-banking is due to Australia’s “lack of sophistication in comparison to comparable markets.

According to Bragg, it is in the traditional banking system’s best interests to stifle the expansion of the clear-cut Crypto regulations in Australia, saying:

Where the financial business controls currencies, there is a strong interest in maintaining the status quo in banking and finance. And they must investigate this to ensure that it is the best course of action for Australia because when innovation occurs, the response is not to lock the door on it.

To sum-up

Bragg underlined the committee’s aim to be “thoughtful and careful” to answer queries about whether Bitcoin’s price is subject to manipulation but stressed the presence of “unsavory” activities in traditional markets.

Everything is subject to market manipulation,” he remarked, adding that “in their role as guardians of the financial system […] throughout the years, the banks have engaged in a lot of nasty activity.

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References:
https://cointelegraph.com/news/asx-sounds-crypto-exchange…

https://cointelegraph.com/news/senator-warns-lack-of-regulations…
https://cointelegraph.com/news/new-occ-head-requests-review…

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