Corporate watchdog ASIC has moved to licence cryptocurrency investment

Corporate regulator, the Australian Securities and Investment Commission (ASIC) is ramping up its oversight of the investment side of the local cryptocurrency market with licences for crypto-asset holders.

The regulator has introduced a new “crypto-asset” section in its licensing applications and responsible entities seeking to hold them will need that an authorisation in relation to crypto-assets.

The details are set out in here.

ASIC’s new guidance for product issuers and market operators on regulatory obligations in relation to crypto-asset exchange traded products (ETPs) and other investment products is set out in two new information sheets: Information Sheet 225 Crypto-assets and Information Sheet 230 Exchange traded products: Admission guidelines.

The information covers good practices for market operators in how they admit and supervise these products, and good practices for product issuers in how they establish and operate these products.

Key matters covered by ASIC’s good-practice guide include admission and monitoring standards, custody of crypto-assets, pricing methodologies, disclosure and risk management.

It follows the recent Senate report into digital assets, which argues that Australia could be a global hub for cryptocurrencies, making 12 recommendations develop the sector

ASIC Commissioner Cathie Armour said good practices and licensing changes follow ASIC’s public consultation in Consultation Paper 343 Crypto-assets as underlying assets for ETPs and other investment products in June 2021

“Crypto-assets have unique characteristics and risks that must be considered by product issuers and market operators in meeting their existing regulatory obligations,” she said

“The good practices we published provide practical examples of how these obligations may be met, in a way that maintains investor protections and Australia’s fair, orderly and transparent markets.”

Irfan Ahmad, APAC product lead of State Street Digital, said the ASIC guidance on crypto-asset related investment was “a progressive and significant step towards the integration of crypto-assets” for Australia’s financial ecosystem.

“It provides clarity for issuers and market operators on how to bring crypto-asset exchange traded products (ETPs) to Australian investors,” he said

“Client demand for investment in digital assets, including cryptocurrencies, is on the rise globally, and Asia Pacific is no exception to that trend. We are seeing higher demand to service those crypto-assets.”