While Central Banks around the world are waiting in hope that the situation with the turnover of virtual assets will resolve naturally, the Australian Securities and Investments Commission (ASIC) is planning to develop the necessary regulatory framework for monitoring the movement of cryptocurrencies. Officials of the department motivate it by the fact that the digital economy should become safer and more transparent for investors. But it’s all too safe. The legal system of this country can be considered the most adapted for the turnover of cryptocurrencies and the protection of investors. Maybe the authorities of the Green Continent want to break the mould in the legal regulation of the virtual assets market?
Believe it or not, but it was ASIC concerned about the market transparency and the security for investors, since in September 2017 the commission published a circular, in which it provided quite clear recommendations, which norms of the national law should be applied to certain processes taking place in the digital economy.
For example, the ICO in Australia falls within the scope of the collective funding legislation. When tokens are issued there are some peculiarities following: firstly, the transfer of assets for the purpose of making a profit and the formation of a common pool of assets take place; and secondly, the persons who provided assets do not have tools to influence the policies and the management of the enterprise. This is a direct reference to the corporate law.
In addition, depending on the situation, the cryptocurrency is defined as a means of payment; or as shares, in case the holders grant some property or corporate rights; sometimes as derivatives - if their price during the ICO is tied to some other material values.
Also, the cryptocurrencies turnover is regulated by the standard financial legislation, if the tokens are tied to specific securities, and the organizations that trade them in the secondary market or carry out the primary issue have the relevant license of the regulator. At the same time, in accordance with the Australian law, all participants of primary issues must provide reliable information about the subject and the form of investing to ASIC and direct investors.
On April 11, Australia introduced uniform rules for the activities of crypto-exchanges. From the date of publication of the document, the trading platforms should operate according to the "know your customer" scheme and register with the Australian Transaction Reports and Analysis Centre (AUSTRAC). Moreover, the three largest crypto-exchanges of the fifth continent have already adopted new game conditions.
At first glance, within the current regulatory framework, the market of cryptocurrencies on the Green Continent is well regulated. But the current legislation has one significant drawback: it does not allow the crypto market to develop. And most importantly, to become clean of unscrupulous participants.
The development of new legislation is included in the agency's development plan for 2018-2022. According to it, ASIC will organize a structure that will apply "the principles of regulation of market infrastructure providers for crypto-exchanges" and prevent cases "where there are suspicious behavior and potential harm to consumers and investors." The details of the legal status and the form of this "structure" are still unknown. It is possible that the rules of self-regulation with mandatory participation will be applied during its creation and activities for the first time.
In other words, to become a participant of the crypto market one must obligatorily obtain a license and join the non-commercial organization setting selection criteria and monitoring the activities of its participants. There are some characteristic features. In particular, it is stated in the plan that the structure must be interdepartmental.
Approximately under this principle, many professional communities are organized in different countries of the world: doctors and medical industry in the USA, lawyers and legal offices in France, financiers in Great Britain ...
However, there can be many organizational forms. The essence of innovation is simple. Today, Australia is the 14th in the world in terms of the crypto market volume. For a country of this size and the economy volume (the 13th in the world in terms of GDP), the indicator is mediocre. Moreover, the traditional branches of the economy, which render a profit to the state, are now under a strong blow. In particular, the agriculture of the Green Continent hardly competes with new agrarian giants such as China, Brazil, and Russia, whose products are much cheaper.
The cryptocurrency industry is a good chance to right the ship in the national economy. And taking into account the high Australian legislative standards, the crypto market can finally get the model of the legal regulation that it dreams about.