The impacts of FTX’s collapse are being carefully monitored by a spokesperson for Australian Treasurer Jim Chalmers.

Cryptocurrencies have been around for almost a decade now, and yet there is still no solid regulatory framework surrounding them. This has caused a lot of issues for both crypto traders and investors, as well as businesses that accept cryptocurrencies as payment. The Australian treasurer, Jim Chalmers, has recently promised that this will be a priority for the government in the near future though. This is great news for the crypto community, as it will provide much-needed clarity and certainty. Stay tuned for updates on this issue!

The impacts of FTX’s collapse are being carefully monitored by a spokesperson for Australian Treasurer Jim Chalmers.

In light of the FTX exchange’s recent and devastating collapse, the Australian government has recommitted to its goal of creating a strong regulatory framework for cryptocurrency.

Last week, when FTX fell, a spokesperson for Australian Treasurer Jim Chalmers stated that they are now planning on regulations to improve investor protection next year, according to a Nov. 16 report from the AFR. The announcement was made in light of FTX’s fall and volatility in crypto-asset markets as well as possible spillovers into other financial markets more broadly.

“These developments highlight the lack of transparency and consumer protection in the crypto market, which is why our government is taking action to improve the regulatory frameworks while still promoting innovation.”

This call for fast-tracked regulation comes as 30,000 Australians and 132 companies have been affected by Sam Bankman Fried’s empire.

The only way to rebuild trust in trading platforms, according to Michael Bacina (digital asset specialist at Piper Alderman lawyers), is through regulation.

“Regulatory certainty is key to rebuilding trust in relation to centralized exchanges, and while law cannot eliminate bad behavior, it can set powerful norms and standards which make that behavior easier to find.”

Talwar, who is the head of tax at crypto tax platform Koinly Australia, as well as a retail investor himself noted that:

“Following the FTX fallout highlights the need for sensible regulations within the crypto world, both domestically and across the globe, in order to eliminate uncertainty and remaining grey areas and provide clarity around digital assets — especially for retail consumers.”

“[But] the challenge will be ensuring that regulation does as intended to effectively protect consumers without suppressing industry growth,” he added.

According to Talwar, who is familiar with the situation, Australian trading platforms must follow the guidelines set by the Australian Transaction Reports and Analysis Centre (AUSTRAC). However, there have been suggestions to create a market licensing regime.

The regime would establish “capital adequacy and auditing standards” to show that trading platforms are honest in their dealings. This is important, Talwar continued, because many exchanges offer high-risk products with the incentives of great rewards to attract customers away from other businesses.

Bacina also stated that the “measured approach” taken by the Australian government could also position the country to become an industry leader in digital asset regulation:

“When Australia brings in technology-enabling custody rules for centralized holders of crypto-assets, we will either be a leader in the space, or catching up, depending on how fast other jurisdictions, like Singapore and Europe, move to make rules.”

The Treasury is working to better protect investors by creating a “token mapping” system. This will help identify which digital assets should be regulated and how, according to an Aug. 22 statement by Assistant Treasurer Stephen Jones.

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