The Australian Advisory Committee Calls for Regulating Cryptocurrencies

  • The analysis shows that at least 3 million people own crypto-related products in Australia.
  • The committee raises security concerns in crypto exchanges.

The Australian Cyber Security Industry Advisory Committee released its analysis on cryptocurrencies. Currently, Bitcoin is the most popular choice among Australians.

n their research, the committee advises regulators to begin regulating the crypto markets. At the time of writing, there are no crypto regulations in Australia.

The analysis shows that at least 3 million people own crypto-related products in Australia. Earlier reports suggest that approximately 18% of Australians own a cryptocurrency.

Many Australians do not understand what are cryptocurrencies according to the research. The committee warns of security risks that are involved in cryptocurrencies, such as market volatility and theft.

One of the main points the committee advises on is cyber security. Although not directly mentioned in the report, cold storage offers greater security than hot wallets. Additionally, security audits by third parties may enhance the exchange’s security against cybercriminals.

Rug Pulls and Security Audits

Moreover, rug pull cases have been on the rise. A rug pull is when the token’s developers pull liquidity after investors are lured into buying the token. On some occasions, the developer blocks selling the token at a certain level.

A recent example is the ‘Web3memes’ token. Liquidity was pulled, 635 BNB were laundered via Tornado Cash.

web3memes token

Binance, for example, has partnered with CertiK and PackShield to audit new project tokens that are listed on the exchange.

The committee said that outages in crypto exchanges may have severe consequences. In May 2021, Binance and Coinbase were among the largest crypto exchanges in today’s markets that faced a large-scale outage.

It has been estimated by the committee that outage resulted in losses of up to $1 trillion. Traders and investors were unable to exit their trades during the outage and were prone to market volatility.

In addition, crypto exchanges are being targeted by ‘state-sponsored actors’. It has been reported that various successful attacks originated from North Korea. It may only take a few minutes to steal millions of dollars in a successful cyberattack.

Andrew Penn, the Industry Advisory Committee Chair and CEO of Telstra, said, “The very fundamentals of our finance system have also been turned on their heads thanks to cryptocurrencies and decentralised finance models.

“New crypto billionaires are minted daily, while just as regularly someone loses it all, betting the wrong way. It has also become a major channel for money laundering, in particular within jurisdictions that lack adequate monitoring and oversight.

“Protecting and educating consumers is good, but it only does part of the job: we still need to ensure those trading and spending cryptocurrency in Australia are protected by legislation and secure market settings.”