As crypto winter sets in once more, industry players in Australia, one of the world’s most crypto-friendly nations, watch closely for a shift in the r
As crypto winter sets in once more, industry players in Australia, one of the world’s most crypto-friendly nations, watch closely for a shift in the regulatory climate.
Anthony Albanese, the new Australian Labor Party prime minister, has made regulating crypto a top priority. However, neither he nor his cabinet has given a clear indication of how it may approach the unregulated space.
“Labor campaigned for government without a policy for cryptocurrency,” says Senator Andrew Bragg, a member of the Liberal Party, which was recently cast into opposition after nine years in government.
The 37-year-old spearheaded a Senate report on crypto regulation last year that made 12 key recommendations on issues ranging from exchange registration to taxation and debanking. Speaking at the Australia Blockchain Week conference in March, he proposed the Digital Services Act, a legislative package that consolidated the report’s recommendations into law.
However, Bragg’s Liberal Party lost its parliamentary majority to the Labor Party in a federal election in May, and the act’s future remains uncertain.
“There have been no utterances about what Labor’s policies will be. It could be anything at this stage,” he added.
The Treasury declined to comment on its crypto policy plans for the report. So far, the office has only clarified that it will continue to exclude crypto from being taxed as a foreign currency, following El Salvador’s adoption of Bitcoin as legal tender.
Industry folk can only guess what the new government might do next, but Ron Tucker, founder and chair-emeritus of lobby group Blockchain Australia, sees a “silver lining” to this pregnant pause. He warns against the kind of knee-jerk responses to market volatility seen in other countries.
“Though we need to protect consumers, if we rush regulation, we will likely get the settings wrong, which will stifle innovation in the ecosystem and lock Australia out of the future growth of the global crypto market,” Tucker says.
“In truth, the proposals made in the Bragg report are only about 70% of the way. They could do with more work, and recent events such as the collapse of TerraUSD and Celsius have shown where the gaps are. We are now at a critical juncture, and so this is a chance to ensure we don’t head down the wrong path.”
Pioneer of self-regulation
While the focus has been on knee-jerk bans and crackdowns elsewhere, Australia has been quietly trailblazing a progressive approach to crypto.
“There is an unsung story of Australia as a first-mover in this space,” says Tucker, who founded Bit Trade — one of the country’s first successful cryptocurrency exchanges — in 2013 and shortly after led the Digital Currency Code of Conduct initiative that set the best-practice standards for the self-regulatory model that has undergirded the Australian crypto industry since.
Tucker recalls watching the pennies drop as he walked politicians in Canberra through the Bitcoin white paper back in 2014.
“The government was very responsive and endorsed our proposals for a self-regulated code of conduct, which was the first of its kind in the world,” he says.
“There were not many other industry bodies in other countries at the time, but more soon followed.”
The proposed self-regulating model was exported after Tucker’s group joined with counterparts in Singapore and the United States by setting up an informal alliance, the Global Blockchain Forum, in 2016. It then grew to have a dozen other member countries that coordinated through a multilateral memorandum of understanding based on the preexisting Australian code of conduct.
While this light-touch approach has given Australian projects space to grow over the years, the government will need to devote greater resources to formalize and enforce a regulatory model as mounting issues exert pressure on the ecosystem.
“You need to get the balance right and have a principled approach that remains flexible enough to encourage innovation in the industry,” says Caroline Malcolm, head of international public policy and research at Chainalysis — an industry consulting firm and blockchain analysis company that recently set up shop in Canberra.
Fraudulent advertising
Crypto ads are in the crosshairs of Australian regulators. The country’s top consumer watchdog, the Australian Competition and Consumer Commission, or ACCC, recently took Meta to court, alleging the company is legally responsible for losses incurred by users who engaged with scam crypto ads featuring fake celebrity endorsements that have run on Facebook since 2019. This has renewed the conversation around consumer protection for crypto investors in policy circles.
Malcolm predicts Australia…
cointelegraph.com