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The Australian Department of the Treasury is considering applying sector-specific codes and standards to banking and cryptocurrency scams as part of its proposed framework.
On November 29, a consultation paper titled “Proposed Scams Code Framework,” aimed at establishing a new framework for addressing consumer and business scams, was released by Australia’s Department of the Treasury. The proposal considers applying sector-specific codes and standards to address various types of scams, including those related to banking and cryptocurrencies.
The consultation paper suggests assigning mandatory industry codes for different types of scams, with a focus on key sectors such as banks, telecommunications providers, and digital communications platforms. Additionally, a category for “future sectors” is proposed, which would include cryptocurrencies, non-fungible tokens (NFTs), and related trading platforms and marketplaces.
The goal of the framework is to delegate clear roles and responsibilities to both government and private entities involved in combating scams. It emphasizes the need for measures to prevent, detect, disrupt, and respond to scams, along with the sharing of scam intelligence across and between sectors.
The Treasury’s proposal comes in response to the increasing prevalence of scams in Australia, with consumers and businesses reportedly losing at least $3.1 billion to scams in 2022—an 80% increase from the previous year. Despite existing initiatives to address scams, the government aims to enhance its efforts with the new framework.
The Treasury is inviting comments on the recently released consultation paper until January 29, 2024. The new framework seeks to enhance existing initiatives to address scams and improve the effectiveness of measures in combating fraudulent activities.
Notably, the proposed mandatory industry codes will outline the responsibilities of the private sector regarding scam activity. The National Anti-Scam Centre (NASC), led by the Australian Competition and Consumer Commission (ACCC), the Australian Securities and Investments Commission, the Australian Communications and Media Authority, and specialist support services, is currently working together to combat scams in Australia.
Australia Plans to Regulate Cryptocurrency Exchanges Under Existing Laws
The country has been actively creating a framework to protect its citizens and refine regulations surrounding cryptocurrency. Rather than introducing new rules exclusively for cryptocurrencies, the regulation of crypto exchanges will fall under existing financial services laws.
In October, Australia’s Treasury announced plans to release draft legislation covering licensing and custody rules for crypto asset providers by 2024. Once the legislation becomes law, digital asset exchanges will have 12 months to transition to the new regulatory framework. The timeline suggests that it could take until 2025 for an Australian digital asset platform to obtain a license under the proposed regime.
This development marks a significant step by the Australian government in formulating a comprehensive crypto regulation policy. The proposal, initially expected by mid-2023 after its announcement in February 2023, outlines that crypto exchanges holding more than AUD 1,500 of any one client or more than AUD 5 million in total assets would require an Australian Financial Services license granted by the Australian Securities and Investments Commission.
The proposal, which addresses 32 themes, invites written submissions by December 1, 2023. The Treasury and the Reserve Bank of Australia plan to release a joint report around the middle of 2024, offering a comprehensive overview of central bank digital currency (CBDC) research in Australia and outlining a roadmap for future work.
The release of the proposal coincided with a speech by Australia’s Assistant Treasurer and Minister for Financial Services, Stephen Jones, at the Australian Financial Review Crypto Summit (AFRCM). The details of the proposal, focusing on licensing and consumer protection, were reported during the summit.
The primary focus of this regulatory framework is to supervise and regulate cryptocurrency exchanges and service providers, with less emphasis on individual cryptocurrencies or tokens. However, the Australian Treasury is contemplating the requirement for crypto exchanges to obtain a financial services license from the local financial regulator.
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