Australian regulators seek public opinion on crypto ETPs

The Australian Securities and Investments Commission (ASIC) seeks public feedback on exchange-traded crypto asset products (ETPs) and states that it is aware of a growing interest and demand that has increased with its introduction in Australian regulated markets.

In a consultation report released on June 30, the regulator said its top priority is to assess whether the “unique and constantly evolving features” of the crypto asset ETP and whether existing regulatory obligations can be consistently met. Given this complexity and the rapid pace of change in the industry, ASIC notes the need for extensive consultation to assess two key issues:

“(A) whether these products can meet existing expectations for ETPs, including whether crypto-assets are appropriate underlying assets, whether crypto-assets, whether crypto-assets can be reliably valued, and how crypto-assets should be classified by real estate fundamentals;” and (b) how product issuers can ensure that these products comply with our regulatory framework, including custody, risk management and disclosure. “

The ASIC article points out that the regulator believes that not all crypto assets can currently serve as suitable underlyings for ETPs, taking into account the agency’s assessment of maturity, spot industry and futures market regulation. However, the regulator is ready to approve a crypto asset ETP that can meet all relevant assessment criteria. Here the supervisory authority determines:

“At this point in time, we believe the only crypto assets that can meet these factors are Bitcoin (BTC) and Ether (ETH).”

ASIC’s initiative appears to have been gilded by the recent listing of the Ethereum ETP on the Toronto Stock Exchange – which ASIC specifically notes in its article – and the ongoing reviews of the Australian Securities Exchange (ASX) for some crypto ETP applications.

In recent months, ASIC has become increasingly proactive in reaching out to blockchain and crypto companies in the country, trying to build trust and collaboration with the crypto economy. However, the regulator has been criticized by some of these companies for seeing the lack of up-to-date regulations and compliance obligations from crypto companies.

In its statement, ASIC stressed that the way crypto assets are classified and regulated even in Australia is a government issue. The Senate Special Committee for Australia has assessed options for developing a comprehensive regulatory framework for crypto and digital assets, and ASIC stressed that their paper “seeks no way to advance commission decisions”.

Related: VanEck and BetaShares apply for Australian crypto ETF as family offices take over BTC

Public responses must be submitted to ASIC by July 27th. Respondents can choose to send their responses publicly, anonymously, or using an alias.

Speaking to Cointelegraph, BetaShares Founder and CEO Alex Vynokur addressed the question of the ASIC consultation on whether or not it is appropriate to allow retail investors to have crypto assets, essentially ETP through a licensed Australian market. Vynokur said that as a local provider of ETPs and other ASX exchange-traded funds, BetaShares believes this approach offers better consumer protection than direct access over the internet through exchanges.

Vynokur also agreed to the proposal that managed investment products such as ETPs should be limited to “a small subset of crypto assets that can have strong liquidity, transparency and availability. Pricing “.