ASIC Issues Guidance on Crypto-asset Investment Products

ASIC Issues Guidance on Crypto-asset Investment Products

Written by


Edited by


Written on

Nov, 2021

Updated on

Feb, 2022

Table of content

On Friday, the Australian financial markets regulator announced guidelines and standards for the launch of crypto exchange-traded products (ETPs) and other investment products, which might lead to the listing of cryptocurrency instruments on Australian stock exchanges in the coming months.

On its licensing application, the agency has created a new ‘crypto-asset’ category, which will give cryptocurrency service providers legitimacy.

The Australian Securities and Investments Commission (ASIC) has been consulting on the same since June, so, these guidelines did not come as a surprise. It came because there has been a growing interest among Australian market participants for the launch of these types of crypto DeFi products and NFTs.

Cathie Armour, the commissioner of ASIC, says that “Crypto-assets and have unique characteristics and risks that must be considered by product issuers and market operators in meeting their existing regulatory obligations.”

Honest market practices

These new guidelines and requirements mainly cover monitoring standards and admission, crypto-assets custody, pricing methodologies, disclosure, and risk management. All of these requirements and guidelines are included under good market practices.

The regulator also emphasized the importance of Bitcoin custody, stating that the best way to store private keys is in cold storage, or wallets that are not linked to the internet. Furthermore, businesses must create several backups and store them in different geographical places.

Cathie Armour added: “The good practices we published provide practical examples of how these obligations may be met, in a way that maintains investor protections and Australia’s fair, orderly, and transparent markets.”

Currently, only Bitcoin and Ethereum fit ASIC’s criteria. However, the agency anticipates that the number of cryptocurrencies that meet its requirements will grow over time especially after the rise of NFT culture.

Why are these new regulations needed?

It is important to know what you are investing in and if it is trustable. Regulation is becoming more necessary because of the number of new coins being established, and especially for coins that are started as a joke (we can all think of some meme coins.) These types of regulations are necessary.

The Australian regulator had previously issued a warning against unlicensed cryptocurrency exchanges that provide services to Australia, citing the dangers of investing in bitcoin futures and options on offshore platforms.

Australia’s Securities and Investments Commission (ASIC) has introduced a new “crypto-asset” and NFT section in its licensing applications that holders of underlying assets that comprise crypto-asset will need.

Important news

Quick Links

Hottest offer