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 a consultation that began in late September on draft rules extending finance sector laws to crypto exchanges.
Assistant Treasurer Daniel Mulino addressed a crypto conference virtually last month to introduce the government’s consultation. Source: Digital Economy Council of Australia
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 registration 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 let regulators “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.”
Bowler said that the draft legislation doesn’t give clarity on how to determine if a cryptocurrency is not a financial product or how a platform can “be treated as a financial market when it doesn’t trade financial products? That’s a contradiction that needs resolution.”
She added that the laws also introduce multiple licenses “without clearly articulating the consumer benefit or the specific risks it seeks to address.”
“Regulation should be proportionate and fit for purpose. Without that, we risk building a regime that is burdensome for businesses but does not necessarily enhance consumer protection.”
Legislation anticipated for early 2026
Crypto.com general manager for Australia, Vakul Talwar, said the Albanese government shouldn’t “take their foot off the throttle” and work to amend and introduce a bill “as quickly as possible,” which he predicted could happen as early as March.
Related: Countries across Africa approve new crypto laws as adoption grows
He added it was unlikely that the bill would be held up by debate and amendments, as it “seems as though this will largely have bipartisan support.”
“We would like to see legislation finalized as soon as possible and, in our opinion, this certainly needs to happen by the end of 2026,” he added.
Edward Carroll, the head of global markets at crypto investment firm MHC Digital Group, said that “the reality is that we probably won’t see legislation introduced before the end of 2026.”
“There’s still meaningful work to be done translating consultation feedback into a workable bill, but the sooner the rules are formalized, the sooner businesses can plan with confidence,” he added.
Magazine: Hong Kong isn’t the loophole Chinese crypto firms think it is