Australia’s crypto exchanges have been largely positive about the government’s proposed crypto laws, but further clarity has been requested from the Treasury by them.
Australia’s crypto industry has largely supported the government’s draft crypto legislation unveiled last month, but additional clarity has still been requested from the Treasury in response to a consultation.
“The draft legislation, as it stands, leaves some critical questions unanswered,” was stated by Caroline Bowler, the former CEO of crypto exchange BTC Markets, in a communication.
“We support the government’s intent to bring structure to the digital asset sector. But structure must come with clarity.”
The Treasury concluded a consultation on Friday that had begun in late September regarding draft rules extending finance sector laws to crypto exchanges.
Two new financial products would be created by the draft law under the Corporations Act: a “digital asset platform” and a “tokenized custody platform,” both of which would necessitate an Australian Financial Services License and registration with the Australian Securities and Investments Commission (ASIC).
Swyftx Says Draft Law Requires Further Refinement
In its submission to the Treasury’s consultation, the crypto exchange Swyftx stated that the draft law requires “simplifying and clarifying,” particularly concerning the powers that are given to the government and the manner in which exchanges can operate.
The Treasury was informed by the company that the draft law would permit “a high degree of discretion” by the Treasury and enable regulators to “impose fundamental changes.”
It was stated by Swyftx that the law should contain a provision “to guide future regulatory interpretation” and the powers of the Treasury and ASIC to designate platforms and establish minimum standards should be clearly delineated.
The executive director and financial chief at blockchain firm CloudTech Group, Mandy Jiang, stated that the draft laws constitute a “significant step forward,” but that “many critical details,” such as licensing and custody standards, are being delegated 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 Identifies Gaps in Proposed Legislation
It was also added by Swyftx in its submission that the draft laws do not provide enough clarity on how Australian crypto platforms can legally source liquidity from offshore exchanges, which was described as critical for “a level playing field with international markets.”
Concern was also held by the company that the regulations do not permit licensed financial advisers to offer counsel on cryptocurrencies, only allowing advice to be given on the regulated platforms providing crypto services.
Swyftx CEO Jason Titman that the approach of regulating crypto under financial services law was supported by the company, but that 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.”
It was stated by Bowler that the draft legislation does not provide 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 further stated that numerous licenses are also being introduced by the laws “without clearly articulating the consumer benefit or the specific risks being sought to be addressed.”
“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.”
Final Legislation Expected by Early 2026
Crypto.com general manager for Australia, Vakul Talwar, stated that the Albanese government shouldn’t “take their foot off the throttle,” and that work should be done to amend and introduce a bill “as quickly as possible,” which he predicted could occur as early as March.
He also stated that it was unlikely 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.
It was stated by Edward Carroll, the head of global markets at crypto investment firm MHC Digital Group, that “the reality is that legislation probably won’t be seen 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.
