On 30 June 2021, the Australian Securities Investment Commission (ASIC) released Consultation Paper 343: Crypto-assets as underlying assets for ETPs and other investment products (CP343) which calls for submissions on ASIC’s proposed approach to regulating exchange traded products (ETPs) that invest in, or provide exposure to, crypto-assets. CP343 is limited to proposing good practices for ETPs and other investment products providing exposure to crypto-assets under the current regulatory framework.
Despite the immense growth in popularity of cryptocurrencies and other digital assets (crypto-assets) in recent years and the fact that ETPs are one of the fastest growing investment fund categories in Australia, there remains considerable uncertainty around the legal status and listing potential of crypto-related ETPs on Australian exchanges.
The proposals outlined by ASIC in CP343 to accommodate crypto-related asset regulation in Australia may see entities with crypto-related assets able to list them on Australian exchanges with more ease in the future.
Current classification and regulation of crypto-assets
As noted in our previous alert, the regulatory framework around crypto-assets in Australia has so far relied on existing approvals enshrined in the Corporations Act 2001 (Cth) (Corporations Act). As noted in paragraph 11 of the CP343, crypto-assets that do not fall within the existing regulatory perimeter of financial products are generally unregulated by ASIC.
In addition, the Australian Stock Exchange (ASX) and the National Stock Exchange (NSX) have taken a very cautious approach to entities which currently have any involvement with crypto-assets. Currently, DigitalX (ASX:DCC) is the only listed company on the ASX with