Australia's financial services regulator has been asked several times about the use of financial services licenses by cryptocurrency exchanges, which do not cover cryptocurrencies.
The Guardian Australia reported that failed cryptocurrency exchange FTX obtained an Australian Financial Services License (AFSL) by acquiring a company that already has a license, and the Australian Securities and Investments Commission (ASIC) did not carry out any verification to make sure. what FTX is . The license is available.
Another major cryptocurrency platform in Australia, Crypto.com ranks as one of the most regulated cryptocurrency exchanges in the world and is currently a major sponsor of the AFL. Per year In 2020, Crypto.com announced that it could acquire AFSL through the acquisition of CardGroup.
Guardian Australia has seen correspondence between Liberal Senator Andrew Bragg and ASIC Chairman Joseph Longo this year expressing concerns about Crypto.com's representation in the AFSL.
In July, Bragg asked what Crypto.com could do voluntarily after Bragg complained about the platform's lack of customer support.
In August, Longo responded that the license "enables Foris GFSA," the Australian operating company of Crypto.com, "to provide comprehensive financial product trading and advisory services to retail and wholesale clients in relation to financial products including product fees ".
In September, Bragg responded to Longo, asking if Crypto.com could "make it appear as if the products or services they offer are regulated when they are not."
"If the current Crypto.com AFSL license is invalid, can you suggest what steps Asic is taking to resolve this issue?"
In late September, Longo responded to Force Dax Au, a spokesperson for Force GFSA, a cashless payment facility known as Crypto.com Pay.
Longo said that on the Crypto.com website, a product announcement states that its financial service is related to Crypto.com payments and that "[Crypto.com] does not appear to be operating under the wrong AFS license."
A Crypto.com spokesperson said the company went through a formal licensing process for most of the countries it operates in, including Singapore, the UK and the US, but in Australia Card Group has offered to buy cryptocurrencies. com can launch its Visa card in Australia given the relationship of the Australian company with Visa.
Bragg told Guardian Australia that he wants ASIC to step in and stop cryptocurrency firms from misleading investors about what the license covers.
"I am concerned about the behavior of the company as a regulated crypto business in the absence of such a licensing system," he said. "ASIC must ensure that companies do not engage in misleading or misleading conduct in this area."
Swinburne's Chief Financial Officer, Dr. Dimitrios Salampasis said that “the lines are very blurry” and that cryptocurrency companies holding AFSLs can be misleading to both investors and consumers in general.
“It is true that crypto and digital asset companies are not required to have an Australian financial services license because there is currently no such regulation in Australia,” he said. “This can be very dangerous as it gives investors and consumers the false impression that they are protected and creates unrealistic expectations.”
"Having AFSL does not mean that cryptocurrencies will automatically become legal."
Salampas said exchanges need to be careful and clear about what the license covers.
According to him, regulation is important.
“The longer it takes to establish a fair, adequate and rigorous regulatory framework, the more serious and aggravated the problems will be and the more consumers will be deceived and confused,” said Salampasis.
Bragg blamed confusion by Treasury Secretary Steven Jones's client over the regulation of cryptocurrencies by the previous Morrison administration in March of this year.
The Albanian government has abandoned the consultation in favor of a token map revision, and the government is expected to issue a law regulating the cryptocurrency market in 2023.
The Senate voted Wednesday to allow Jones to report on Treasury Department consultations, as well as policy options, bills and consultation proposals, on Tuesday of next week.
The order was supported by the Coalition and the Cross Bench, but opposed by Labor senators.
Guardian Australia has requested comment from the Minister's Financial Services Authority and ASIC.