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Oz Bitcoin Industry Facing Demand For More Regulation

The Australian bitcoin industry is facing demands for more regulation, following recent events, including news that South Australian-based bitcoin exchange Igot may be on the brink of collapse, owing thousands of dollars to customers who sought to buy bitcoins.

The company has denied it is insolvent and has said it will return the money to customers.

The Australian Securities and Investments Commission has said it is powerless to act because bitcoin is currently not considered a financial product or service. However the commission has also said it will investigate should Igot collapse.

David Temple, co-founder of Coin Loft, a Melbourne bitcoin exchange, is among those in the industry calling for greater regulation, which he said would bring Australia into line with plans in the USA and Europe.

However, the Australian Digital Currency and Commerce Association – which claims to represent most of the larger digital currency businesses in Australia – says it is opposed to greater government regulation. It is preparing to publish a code of conduct for the industry that it says will improve consumer protection.

CEO Nicholas Giurietto yesterday said the association was “disappointed” to learn of the difficulties faced by Igot customers. “The impact on consumers is clearly devastating,” he said.

Crucially, he said, the new code, due for launch in May, will require any digital currency exchange that receives customer funds, but is unable to fulfil a customer order within 24 hours, to place those funds in a separate trust account.

“This obligation would have provided important protection to the customers of Igot,” Giuretto said.

Giuretto told CDN the digital currency business in Australia now features around 15 good-sized operators, with a “long tail” of smaller ones. Around 10 of the major exchanges have joined the association, along with other members involved in digital currency operations. – David Frith

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