Labor

Consumer advocates have begun urging the new Australian Labor government to protect citizens from crypto scams. This accompanies the release of a national survey conducted by CHOICE on Australians’ attitude towards crypto:

Have you been negatively impacted by purchasing cryptocurrencies such as Bitcoin or Terra Luna?@CHOICEAustralia would like to learn more about your experiences. Please send us a DM or email with your story to [email protected]
— CHOICE (@choiceaustralia) May 26, 2022

CHOICE vs Crypto Scams

Consumer advocates are calling for industry reform in the crypto and blockchain sector as the Labor Party embarks on its first term of government. Despite only one in 10 Aussies having reportedly purchased crypto in the past 12 months, a concerning cohort of those were caught up in investment scams. On top of this, the recent flattening of the market has seen billions of consumer dollars lost.

The combination of crime and market volatility has prompted CHOICE, Australia’s leading consumer advocacy group, to petition the incoming government for change:

https://www.linkedin.com/in/patrickveyret/overlay/photo/

CHOICE is hearing from many Australians about financial loss and other harm caused by purchasing crypto assets that were not what they appeared to be.
Patrick Veyret, spokesman for CHOICE

CHOICE is calling for more stringent regulation and is composing a submission to the federal treasury. The submission will request several changes, including a “single definition for crypto assets” for regulatory purposes, as well as the requirement for crypto exchanges to install appropriate measures to “prevent fraudulent payments and to reimburse consumers” should fraudulent payments occur.

Consumer Watchdog Nips Crypto

The Australian Competition and Consumer Commission (ACCC) has been cracking down on crypto scammers over the past year. In March 2022, the ACCC sued Meta, Facebook’s parent company, over its failure to prevent the circulation of scam crypto ads. The misleading ads took the form of several local Aussie celebrities appearing to endorse crypto investments and were in adjudged to be in breach of Australian consumer law.

An uptick in the number of crypto investment scams was reported by the consumer watchdog in April this year as crypto superseded bank transfers in terms of investment scams. As a result, losses to crypto scams had increased by 90 percent in the space of three months.

Albanese Prioritises Crypto

Labor has a lot of priority policies to install as it gets stuck into its term and, notably, crypto is a highlight on the list. Alongside its plans to tackle the cost of living and more urgently address the issue of climate change, Albanese’s government will be continuing the outgoing Liberal Party’s work towards regulating the industry as efficiently as possible.

Caroline Bowler, CEO of BTC Markets, has weighed in on the subject, stating that Labor will be looking to create a digital assets-focused regulatory bill. However, it will be a priority to avoid the restriction of future innovation while developing such a bill:

https://www.linkedin.com/in/carolinebowler/overlay/photo/

The primary concern would be to put together the appropriate regulatory regime for the marketplace, but also to leave room for innovation.
Caroline Bowler, CEO, BTC Markets

As Labor has inherited an increasingly difficult economic situation, crypto is unlikely to be the only financial sector up for examination.

Roadmap to Regulation

Crypto regulation had been a hot topic in government prior to Labor’s electoral win. April 23 saw the Australian Prudential Regulation Authority (APRA) produce a regulatory roadmap for the crypto industry. The roadmap outlined APRA’s preliminary risk management expectations for “regulated entities dealing with digital assets”.

More recently, the Commonwealth Bank of Australia was forced to halt trading on its pilot crypto app amid market turmoil. The decision was justified by stating that CBA’s focus was on ensuring the endeavour was aligned with the required regulations.

Conversations surrounding the regulation of crypto really picked up in late 2021 as billions of dollars of investors’ money caused an industry boom, with the associated risks noticeably high for both investors and businesses.