Crypto Asset Reform Slowly Gaining Traction

Proposed reforms in respect of crypto-assets are finally gaining traction as the Board of Taxation, the Treasurer and ASIC each made announcements in relation to their role in preparing for these reforms in the past month.

Following the release of the consultation guide by the Board of Taxation in August 2022, the Treasurer announced the Government is consulting with stakeholders on a framework for industry and regulators in the crypto sector.

The Government’s starting point will be a consultation paper on ‘token mapping’ which is set to be released shortly. The Government’s broader review will also consider issues such as:

• gaps in the regulatory framework;
• progressing a licensing framework; and
• providing additional consumer safeguards.

Last month, ASIC also released its Corporate Plan for 2022-2023 which identified crypto assets as a core strategic project. ASIC’s focus will be on:

• broadening its focus on reducing the risk of harm to consumers and enhancing cyber / operational resilience to consider crypto-assets;
• supporting the development of an effective regulatory framework;
• supervising and assessing product disclosure statements and target market determinations of major crypto offerings.

While any progress in this space is welcome, given ASIC’s ‘Retail investor research’ report released in August identified that 44% of Australians who participated in the research held at least one type of cryptocurrency, and that cryptocurrencies were the second most common product type held by investors after shares, industry would benefit from an uplift in the pace.

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