CHOICE, a consumer advocacy group in Australia, wants the Australian government to protect crypto investors. The group called on the federal government to do the needful while proposing a regulatory framework for the crypto industry.
The proposed regulatory framework oversees the activities of crypto exchanges operating in the country.
CHOICE Makes a Move
The group submitted the proposed regulatory framework in response to the Federal Treasury report on cryptocurrency. According to the Treasury’s statement, crypto service providers are firms dealing with custodial wallets and crypto exchange services.
CHOICE responded to the Treasury’s report by saying that crypto investors are not protected and, where applicable, they are not enforced. The market is unregulated, and laws are non-existent.
The proposed regulatory framework has four main areas that the group wants the government to consider. The first is that the group wants a uniform definition of cryptocurrency to allow for better regulation.
Secondly, there should be a license for all crypto exchanges operating in the country. Thirdly, they should be bound by consumer protection laws to prevent misleading advertising and misinformation.
Finally, the group demands that crypto exchanges take measures to check fraud. According to CHOICE, exchanges should have a reimbursement plan to compensate customers when fraud occurs.
The country’s financial watchdog, the Australian Securities and Investment Commission (ASIC), has warned of crypto’s volatility. The commission has previously announced that cryptocurrency is not a financial product.
Commenting on the state of the current regulations, CHOICE’s policy adviser, Patrick Veyret, noted that Australia is lagging. According to Veyret, the crypto industry is booming, with more Australians buying crypto assets.
More Australians adopt cryptocurrency amid the absence of robust regulations to protect their investments. Some people have even lost funds with no ability to get them back, added Veyret.
The CHOICE policymaker cited the recent crash of the Terra network as an example. Investors and traders could not get their money back due to the absence of consumer protection.
The Australian crypto space needs laws to oversee crypto exchanges’ activities and protect investors and their funds.
Crypto Adoption Growing in Australia
According to the recent survey conducted by CHOICE, just one in ten Australians purchased crypto over the past year. However, 71% of the respondents signaled their interest in buying cryptocurrency but didn’t buy it due to fear of scams and market volatility.
Another survey conducted by CHOICE in March involving 1,034 Australians shows striking results similar to the recent survey.
More than half of the respondents have no idea that crypto investment comes with consumer protection like the stock markets. And 50% believe there should be consumer protection laws to protect digital asset investment investors.
Cointelegraph reported in August 2021 that investment scams in Australia led to investors losing more than $50 million. This happened in the first six months of the year.
The government is now under pressure to bring regulatory clarity to the crypto industry and regard crypto as a financial service.