Caroline Malcolm, the head of international policy at Chainalysis, believes that the new rules introduced in Australia for overseeing crypto ads and promotions and safeguards for consumers will take the same route as those in the United Kingdom. These new rules will go into effect in the coming year.
A Crackdown on Crypto Ads
Malcolm spoke on Tuesday while attending an event in Sydney. She said that the Australian model would be quite similar to that of the UK, which means that any misleading advertisement, or one that does not highlight the risk associated with the product would be taken down. She said that this highlighted that advertisement and promotion of crypto products and services were being treated in the same way as that of traditional financial products and services.
The Advertising Standards Authority (ASA) in the United Kingdom had introduced new guidance in March under which advertisers have to clearly mention the risk associated with crypto investment. According to Malcom, a different approach had been adopted in Singapore, which banned all crypto advertisements for retail clients.
Malcolm said that it was not about imposing a ban on crypto ads, or a ban on the sale of crypto assets to a particular community. Instead, she asserted that it was about ensuring that the ads are not misleading and come with full disclosure of what people are buying when they decide to engage with the sector.
She stated that not only will there be rules applicable to crypto advertisements, but there will also be measures implemented for consumer protection. These include crypto exchanges being required to verify in the onboarding process whether the client is aware of the crypto risks or not.
This means that clients would have to answer some questions during the onboarding process to see if they understand specific risks or the overall level of risks. The key is to add a barrier to entry, so people don’t just jump on the bandwagon without proper evaluation.
First Conference in Australia
The Chainalysis Link event where Malcolm spoke was the blockchain data platform’s first in-person conference to have been held in Australia. There were about a hundred participants that belonged to the traditional as well as crypto sectors, as well as the government.
There have been strong hints in the Australian parliament about the need to regulate the crypto sector in the country. The Senate Committee for Australia had published some recommendations in October last year about how crypto and other digital assets could be regulated.
The conversation had moved further in March when a consultation paper had been launched, which asked for feedback regarding the safeguards that should be implemented by crypto-asset service providers and the minimum standards of conduct to be followed.
According to Malcolm, the changes to crypto promotion and advertisement and consumer protection is likely to happen in the next 6 months or a year. However, this would also depend on the newly elected Labor government’s focus on crypto regulation and whether they prioritize it or not.