The digital asset specialist Michael Bacina believes that the only way to re-establish trust in the crypto industry is to introduce regulatory frameworks.
In the light of FTX collapse, the Australian government is reportedly looking to launch a crypto regulatory framework.
According to a news report shared by AFR, a spokesperson for Australian Treasurer Jim Chalmers said that the government is already working on regulations protecting investors.
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The Australian Treasurer spokesperson highlighted that the Australian government is keeping an eye on FTX and is monitoring “further volatility in crypto-asset markets and any spillovers into financial markets more broadly.” Moreover, a person familiar with the matter added:
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.
The head of tax at Koinly Australia, a crypto tax platform, Danny Talwar, believes that by establishing a crypto regulatory framework retail investors will be more protected from exploits.
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.
Although Talwar emphasized that crypto regulations are necessary, the head of tax claims that it is important to protect customers without suppressing the growth of the industry.
When talking about possible regulations, Danny Talwar said that the Australian government is looking to introduce a market licensing regime. Trading platforms will be asked to provide information about “capital adequacy and auditing standards to demonstrate the operational integrity.”
According to digital asset specialist at Piper Alderman lawyers, Michael Bacina, the only way to re-establish investor trust after FTX collapse is by introducing regulatory frameworks.
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.
It is worth noting that the news about the Australian government’s plans to establish a crypto regulatory framework initially broke at the end of August.
