Australia Warns of Consumer Risks Amid Crypto Regulatory Gaps

Australia's financial watchdog has raised alarms about the risks posed by regulatory gaps in the cryptocurrency sector. The Australian Securities and Investments Commission (ASIC) released a report highlighting the challenges of monitoring fast-moving digital currency, payment, and AI companies operating in unclear regulatory environments. These gaps expose consumers to potential bad advice and deceptive practices.

ASIC Chair Joe Longo emphasized the rapid changes in the financial sector, with mounting pressures on consumers, markets, and businesses. Divergent regulatory approaches across jurisdictions further complicate compliance and create uneven consumer protections. The warning comes as the government moves to address these issues through new legislation.

The proposed Corporations Amendment (Digital Assets Framework) Bill 2025 aims to establish Australia's first comprehensive rules for digital asset custodians. The bill, introduced last November, could boost the economy by $24 billion annually through improved efficiency. Under the framework, platforms WOULD require an Australian Financial Services license to operate.