2 mins read Australian Treasurer Jim Chalmers is intent on introducing changes to the country’s crypto regulations, following the most recent troubles experienced by crypto exchange FTX.
The company had to file for bankruptcy after it became known that the exchange kept $1bn in liquidity against $9bn in liabilities and had misused consumer funds to back Alameda Research, a crypto trading firm linked to FTX’s former CEO Sam Bankman-Fried.
A spokesperson for the Treasurer said that regulators in Australia were keeping a close eye on the recent collapse and monitored its implications for the Australian economy.
However, they have also been the reason why the Treasurer’s office wants to change things up. A spokesperson added: “These developments highlight the lack of transparency and consumer protection in the crypto market, which is why our government is taking action to improve the regulatory frameworks while still promoting innovation.”
An estimated 30,000 Australians and 132 companies have been affected by the collapse of the exchange, and in order to move past such cases in future, Australia needs to create a robust regulatory framework that shields retail consumers and companies from harm.
The Australian Transaction Reports and Analysis Centre has already put forward a number of recommendations that could help establish a market licensing regime, which has now been taken up as a mission by the Australian Treasurer.
The main challenged in passing regulations is to address the biggest risks connected to cryptocurrency exchanges, which often promote high-yield products with a significant risk to the consumer and business, without actually offering clear safeguards.
Many regulators around the world have come together to change this by introducing rules focused exclusively on the advertising nature of crypto exchanges and products, which tend to oversell the message to attract consumers. The Australian Treasurer is the latest regulator to take notice of the nth crypto meltdown and act appropriately.
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