“We took this action because we want to make it clear and send a message to the market that you cannot escape getting a financial services license just because you have the word crypto in the name of the product.”
She said that if the court decides these are financial products, it would send a clear message to others operating in the area. Violating corporations law by operating without a financial license can result in penalties in the millions.
Earlier this year, ASIC said identifying misconduct involving high-risk products like crypto was one of its enforcement priorities. Last month, he launched a lawsuit against BPS Financial, the Gold Coast company behind the Qoin crypto asset, alleging he engaged in unauthorized conduct and posted misleading promotional material. . The company said it would defend the case.
On Tuesday, Block Earner chief executive Charlie Karaboga said ASIC’s action was “a disappointing result.”
“We welcome regulation in our space and have spent considerable resources building regulatory infrastructure so that we can provide a range of services to Australian users in a regulated manner and in line with existing guidelines provided by ASIC.”
“From the beginning, client funds with Block Earner have been protected against crypto market volatility, such as the recent fall of FTX and previous cryptocurrency market crashes, and clients can withdraw their funds at any time”, he said.
Block income released a statement last week, saying it had no exposure of any kind to FTX, its subsidiaries or related parties, and that the client’s assets were secure.
The federal government announced in August that Australia would become the first country to plot the number, type and underlying code of available cryptocurrencies. It is “token mapping” Australia’s crypto-asset sector as a first step towards new regulation in the area, which the tax office estimates more than one million people have “interacted” with since 2018.
The industry has called on the government to introduce legislation to reduce risk for investors and transform crypto into an established and safer asset class. The former government developed reform projects Last year that regulators and the Treasury assess and implement.
The Court said ASIC supports the Treasury in its efforts and provides it with market information to help develop the regulatory framework.
“We need regulation that focuses on consumers and investors,” Court said.
“Without wishing to take on the hype associated with the FTX collapse, it’s a very stark reminder of what happens when innovation and creativity take over and investors and consumers are not brought to the fore. These are serious issues involving real people’s money.
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