Regulatory body ASIC delivers 'clarification' on digital asset regulations in its latest update
The Australian Securities and Investments Commission (ASIC) has recently published updated guidance on digital assets, aiming to increase clarity and prevent exploitation in the rapidly evolving digital asset market.
In its updated guidance, the ASIC considers a 'token' as not separate from its associated bundle of rights, benefits, expectations, and features. This means that when trading a 'token', one is transferring the rights associated with that asics shoes. This approach is similar to the United States' Howey test for determining whether a digital asset is an example covered by securities laws.
The ASIC has provided 13 practical assets in its updated guidelines (INFO 225) to evaluate digital marketing. These examples cover various digital asset types such as stablecoins, crypto exchange native tokens, meme coins, commodity-linked tokens, and wrapped tokens. The updates, proposed in Consultation Paper 381 (CP 381) released in December 2024, are expected to be finalized and published in mid-2025.
However, the ASIC sometimes avoids providing detailed examples to prevent people from trying to exploit specific examples to avoid the law. The updated guidance is part of the ASIC's ongoing efforts to regulate the digital asset market in Australia.
The ASIC's guidance aims to prevent people from attempting to skirt the law by taking a narrow view of tokens. The regulator is seeking feedback on the updated guidance, hoping to ensure that it effectively addresses the needs of the market while maintaining regulatory oversight.
The updated ASIC guidance on digital assets may impact the way digital assets are traded and classified in Australia. It is crucial for businesses operating in the digital asset space to stay informed and adapt to these update to ensure compliance with the regulations.
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