Australia Crypto Scene Says Draft Crypto Laws Need More Work

Australia’s crypto industry has largely backed the government’s draft crypto legislation released last month, but has still responded to a Treasury consultation with demands for further clarity.

“The draft legislation, as it stands, leaves some critical questions unanswered,” Caroline Bowler, the former CEO of crypto exchange BTC Markets, said in a statement.

“We support the government’s intent to bring structure to the digital asset sector. But structure must come with clarity.”

On Friday, the Treasury concluded its consultation, which began in late September, on draft rules extending finance sector laws to crypto exchanges.

The draft law would create two new financial products under the Corporations Act: a “digital asset platform” and a “tokenized custody platform,” both of which would require an Australian Financial Services License and for platforms to be registered with the Australian Securities and Investments Commission (ASIC).

Draft law needs more work: Swyftx 

In its submission to the Treasury’s consultation, crypto exchange Swyftx said the draft law needs “simplifying and clarifying,” especially with the powers it gives the government and how exchanges can operate.

The company told the Treasury that the draft law would allow “a high degree of discretion” by the Treasury and regulators “to impose fundamental changes.”

Swyftx said the law should have a statement “to guide future regulatory interpretation” and clearly delineate the powers of the Treasury and ASIC to designate platforms and set minimum standards.

Mandy Jiang, the executive director and financial chief at blockchain firm CloudTech Group, said the draft laws are a “significant step forward” but delegate “many critical details,” such as licensing and custody standards, to ASIC for future guidance.

“Consequently, whether this legislation achieves its stated objectives of fostering innovation and supporting sectoral growth and competition will largely depend on the timeliness and quality of ASIC’s forthcoming guidance,” she added.

Crypto industry sees some gaps in draft laws

Swyftx added in its submission that the draft laws also don’t give enough clarity on how Australian crypto platforms can legally source liquidity from offshore exchanges, which it said was critical for “a level playing field with international markets.”

The company was also concerned that the laws don’t allow licensed financial advisers to advise on cryptocurrencies, only allowing them to advise on the regulated platforms offering crypto.

Swyftx CEO Jason Titman told Cointelegraph that it supported the approach of regulating crypto under financial services law, but its “main concerns right now are to make sure Australian consumers are appropriately protected and that the local industry can compete on a level playing field.”