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    StartKryptowährung NewsBlockchain & Cryptocurrency Laws and Regulations 2022 | Australia

    Blockchain & Cryptocurrency Laws and Regulations 2022 | Australia

    While there have been legislative amendments to accommodate the use of cryptocurrencies, these have predominantly focused on the transactional relationships (e.g., the issuing and exchanging process) and activities involving cryptocurrencies, rather than the cryptocurrencies themselves.

    ASIC has reaffirmed the view that legislative obligations and regulatory requirements are technology-neutral and apply irrespective of the mode of technology that is being used to provide a regulated service. While there has been no legislation created to deal with cryptocurrencies as a discrete area of law, this does not hinder them from being captured within existing regimes under Australian law – see under “Sales regulation” below.

    ASIC’s regulatory guidance informs businesses of its approach to the legal status of coins (or tokens). This depends on how they are structured and the rights attached, which ultimately determines the regulations with which an entity must comply. For example:

    • Cryptocurrency that is, or forms part of a collective investment product that is, a financial product under the Corporations Act 2001 (Cth) (Corporations Act) will fall within the scope of Australia’s existing financial services regulatory regime. This is discussed in more detail under “Sales regulation” below.
    • There has also been a proliferation of lending activities in relation to cryptocurrency. To the extent these lending activities fall within the scope of the credit activities and services caught under the National Credit Consumer Protection Act 2009 (Cth) (NCCP Act), the relevant entities may need to hold an Australian credit licence or be otherwise exempt from the requirement to be licensed.

    ASIC has recently launched a consultation process on its proposals to clarify expectations for crypto assets that form part of the underlying assets of ETPs and other investment products. ASIC proposes to set expectations for market operators, retail fund operators (i.e., responsible entities), listed investment entities (including listed investment trusts and listed investment companies) and Australian financial services licence (AFSL) holders dealing in crypto assets. This primarily centres around criteria that ASIC expects market operators to apply when determining whether a specific crypto asset is an appropriate asset for market-traded products. This broadly requires institutional support of the crypto asset, service providers willing to support the use of the crypto asset, maturity of the spot market for the crypto asset, regulation of derivatives linked to the crypto asset, and the availability of robust and transparent pricing mechanisms for the crypto asset. The consultation also includes ASIC’s proposed good practices in relation to how fund asset holders are required to custody crypto assets, as well as ensuring adequate risk management systems are in place. ASIC proposes to include crypto assets as a distinct asset class on AFSL authorisations for managed investment schemes, but expects that this will only authorise the holding of Bitcoin and Ether in the short term. The consultation process remains open at the time of writing and it is expected that industry feedback will inform how ASIC intends to apply the proposals in the future.

    There are currently no specific regulations dealing with blockchain or other distributed ledger technology (DLT) in Australia. However, ASIC maintains a public information sheet (INFO 219 Evaluating distributed ledger technology) (most recently updated in March 2021) outlining its approach to the regulatory issues that may arise through the implementation of blockchain technology and DLT solutions more generally. Businesses considering operating market infrastructure, or providing financial or consumer credit services using DLT, will still be subject to the compliance requirements that currently exist under the applicable licensing regime. There is a general obligation that entities relying on technology in connection with the provision of a regulated service must have the necessary organisational competence and adequate technological resources and risk management plans in place. While the existing regulatory framework is sufficient to accommodate current implementations of DLT, as the technology matures, additional regulatory considerations will arise.

    Various cryptocurrency networks have also implemented “smart” or self-executing contracts. These are permitted in Australia under the Electronic Transactions Act 1999 (Cth) (ETA) and the equivalent Australian state and territory legislation. The ETA provides a legal framework to enable electronic commerce to operate in the same way as paper-based transactions. Under the ETA, self-executing contracts are permitted in Australia, provided they meet all the traditional elements of a legal contract.

    Find more: Australia gets government app blockchain no – Krypto-NFTs

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