Australian consumer advocacy group CHOICE has called on the federal government to provide better protection for crypto investors while submitting a proposed regulatory framework for cryptocurrency exchanges operating in the country.
The regulatory framework was submitted in response to the federal Treasury’s consultation paper for crypto asset secondary service providers, or CASSPs, defined as firms providing custodial crypto wallets and exchange services. CHOICE commented:
“As it stands, enforceable protections in the unregulated cryptocurrency market are somewhere between negligible and non-existent.”
Outlining four main areas in its framework, the group called for a single definition of crypto for better regulation, a license for exchanges in line with current financial licensing, and for them to be bound by consumer protection laws to prohibit things like misleading advertising.
Finally, CHOICE said crypto exchanges need to enact measures for preventing fraudulent payments and reimburse customers when they occur.
The Australian Securities and Investments Commission (ASIC), the chief financial services regulator in the country, has previously warned that cryptocurrency is not recognized as a financial product. Commenting on the current regulations CHOICE’s senior policy adviser Patrick Veyret said:
“The crypto market is booming, but our laws are lagging behind, more and more Australians are purchasing crypto assets such as Bitcoin and Ethereum without adequate consumer protections.”
Veyret added that there are instances where “people have lost all of their savings with no ability to get their money back,” citing the recent fall of Terra as a “clear example of the extreme volatility in this unregulated market.”
According to an ongoing survey conducted by CHOICE, only around one in ten Australians purchased crypto such as Bitcoin (BTC) or Ether (ETH) in the past year, and 71% who signaled an interest in the crypto market didn’t purchase due to…
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