Australian consumer group calls for regulation of crypto
In a statement to the Australian Treasury, consumer group CHOICE described its crypto regulatory framework, urging the country’s new federal government to prioritize crypto in its financial sector reforms.
While submitting a suggested regulatory framework for cryptocurrency exchanges operating in Australia, the Australian consumer advocacy group CHOICE has urged the federal government to provide more safety for crypto investors.
The regulatory framework was developed in response to the federal Treasury’s consultation paper for crypto-asset secondary service providers, or CASSPs, which are described as companies that provide custodial crypto wallets and exchange services. CHOICE stated:
“As it stands, enforceable protections in the unregulated cryptocurrency market are somewhere between negligible and non-existent.”
CHOICE spokesperson Patrick Veyret said:
“CHOICE is hearing from many Australians about financial loss and other harm caused by purchasing crypto assets that were not what they appeared to be. We’ve seen a number of recent collapses of exchanges where people have lost all of their savings with no ability to get their money back.”
The organization advocated for a clear definition of cryptocurrency for better regulation, a license for exchanges similar to current financial licensing, and for them to be regulated by consumer protection rules to restrict things like misleading advertising.
Finally, CHOICE stated that cryptocurrency exchanges must have mechanisms to avoid fraudulent payments and refund customers when they occur.
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 concerns of price volatility and scams.
CHOICE statistics that 1,034 Australians conducted in March and April revealed that more than half of respondents did not know if trading cryptocurrency comes with consumer safeguards similar to those found in the stock market. Approximately the same number of participants (50%) thought such consumer protections for crypto trading should be implemented.
Since celebrity endorsements and hyped-up marketing have often enticed Australians into buying cryptocurrencies, CHOICE wants the prohibition of misleading and deceptive conduct and unfair contract terms.
But most importantly, CHOICE wants regulation with “no loopholes” that encompasses all crypto service providers. The regulatory regime should also cover all digital assets, including currencies and non-fungible tokens (NFTs).
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