The Australian government, through the Treasury, has announced that it is working to introduce a regulatory framework for Australians and Australian businesses to provide access to digital assets and entities holding digital assets, which will include requiring all digital asset intermediaries to be licensed.。

These reforms target identified consumer pain points while supporting innovation in the use of digital assets and emerging technologies。Implementation of the proposed framework depends on future legislative design and development。

The proposed regulatory framework would apply to digital asset service providers with similar risks to entities in the traditional financial system。The framework aims to leverage the Australian Financial Services Licensing (AFSL) framework to regulate digital asset service providers to ensure consistent oversight and safeguards for consumers.。

The Ministry of Finance has issued a consultation document entitled "Regulating Digital Asset Platforms" for public comments and suggestions by December 1.。

The document is divided into seven parts:

1. Introduction: Explaining the objectives of the reform and the policy issues to be addressed。
2. Regulating digital asset intermediaries: An overview of the proposed regulatory framework for digital asset facilities, including its scope, structure and focus。
3. Licensing Digital Asset Intermediaries: Introducing the Standard and Customized Portfolio of License Obligations for Digital Asset Facility Service Providers。
4. Minimum Standards for Facility Contracts: Proposed Requirements for Presentation of Facility Structures for Digital Assets, Including Custody and Reporting Rules。
5. Minimum standards for financialization functions: describes specific activities that require compliance with additional rules。
6. Other activities: exploring some activities for possible future inclusion。
7. Next steps: outline future milestones related to this recommendation。

The regulatory framework proposed in this document is not intended to address anti-money laundering and counter-terrorism financing (AML / CTF) requirements。Businesses offering digital currency exchange services are still required to register with the Australian Anti-Money Laundering and Counter-Terrorism Financing Commission under the Anti-Money Laundering / Counter-Terrorism Financing Act.。A separate consultation led by the Attorney General's Office is currently considering expanding the range of digital asset-related services subject to AML / CFT regulation in line with the Global Financial Action Task Force standards, including requiring businesses offering such services to register with the Australian Anti-Money Laundering and Counter-Terrorism Committee.。

The Treasury noted that consumer harm associated with digital assets has focused on the vulnerability of intermediaries.。The business model shared by the intermediaries responsible for these injuries is a "multi-functional platform for holding assets for clients" (digital asset platform)。The intermediaries in the digital asset ecosystem are almost all digital asset platforms.。This includes all the dominant players in the digital asset market, both in terms of the volume of transactions it handles and the size of the customer base it serves.。This also seems to include most "brokers," even intermediaries who hold non-digital assets as part of an "asset-backed token" arrangement.。

The recent collapse of digital asset platforms has resulted in considerable consumer losses。For example, the collapse of FTX alone affected about 50,000 Australian consumers.。Common to these failures are (i) heavy losses on assets held on behalf of clients; (ii) inadequate management practices; (iii) inadequate governance structures; (iv) poor operational resilience; (v) fraudulent activities; and (vi) widespread conflicts of interest.。

Overall, the objectives of the proposed framework include:

• protection of consumers;
• Promoting innovation through technology neutrality and regulatory clarity;
• align Australia's digital asset regulatory framework with international jurisdictions, as appropriate;
• and the use of regulatory tools with agility, flexibility and adaptability。