Australian Treasury proposes to regulate crypto exchanges, not tokens
The Australian federal government is charging forward with plans to regulate the digital asset sector at the exchange level, and may soon require cryptocurrency exchanges to hold a financial services license issued by the local financial regulator.
In the newly-unveiled “Regulating digital asset platforms” consultation paper, released on Oct. 16, the Australian Treasury said that the new regulatory framework aims to address consumer harms while still supporting innovation in the digital asset sector.
The core theme of the new regulatory framework is that it aims to regulate cryptocurrency exchanges and service providers instead of individual cryptocurrencies or tokens themselves. Additionally, the consultation paper explained that it will regulate crypto exchanges under pre-existing financial services laws, instead of crafting new crypto-specific rules.
The proposal has seen a mixed reaction from crypto exchanges operating in Australia.
Australian crypto exchange Swyftx’s general counsel Adam Percy called the proposal “thoughtful” and agreed that “the primary focus should be to make sure cryptocurrency users can access blockchain technology with appropriate protections and that there’s room for innovation.”
Jonathon Miller, the Director of Kraken Australia, however, expressed his disappointment at the latest developments, saying that the consultation paper was essentially “shoehorning” crypto in existing financial services regulation.
“Australia is now in the unfortunate situation where our regulation has taken a very long time, so we’re taking the approach of shoehorning crypto into existing financial services regulation,” Miller said. “We’re behind our global peers when it comes to implementing a crypto framework, so I appreciate the need to have something in place locally to provide certainty to platforms like ours.”
“I’m hopeful that we can work collaboratively with the Government to make sure we don’t snuff out the benefits of future innovations in crypto that might fall outside the conventional ‘financial services’ box.
Liam Hennessey, partner at international law firm Clyde & Co said that while its clear that the Treasury is still “grappling” with all of the different types of tokens and services providers, it’s crucial to remember that all new proposals set out in the consultation paper are still only suggestions, and are not legally binding recommendations.
Related: Crypto exchange Kraken ‘disappointed’ over regulator proceedings in Australia
“Whatever the Treasury suggests, it is just that – a suggestion only. The Government is not bound to follow its recommendations, and there will be lobbying once the consultation paper comes out.”
Hennessy said that the consultation paper arguably doesn’t address the more pressing issues facing the crypto industry in Australia, like issues such as the recent slew of de-banking.
“Many licensed digital assets exchanges, both domestic and international, are struggling to find adequate banking arrangements,” said Hennessy.
Notably, the Treasury outlined that the entire point of the consultation paper is to “seek feedback” on the many questions and regulations proposed within in it and advised that any feedback may be submitted by Dec. 1, 2023.
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A hostile environment era deportation policy for criminals is being expanded by the Labour government as it continues its migration crackdown.
The government wants to go further in extraditing foreign offenders before they have a chance to appeal by including more countries in the existing scheme.
Offenders that have a human right appeal rejected will get offshored, and further appeals will then get heard from abroad.
It follows the government announcing on Saturday that it wants to deport criminals as soon as they are sentenced.
The “deport now, appeal later” policy was first introduced when Baroness Theresa May was home secretary in 2014 as part of the Conservative government’s hostile environment policy to try and reduce migration.
It saw hundreds of people returned to a handful of countries like Kenya and Jamaica under Section 94B of the Nationality, Immigration and Asylum Act 2002, added in via amendment.
In 2017, a Supreme Court effectively stopped the policy from being used after it was challenged on the grounds that appealing from abroad was not compliant with human rights.
However, in 2023, then home secretary Suella Braverman announced she was restarting the policy after providing more facilities abroad for people to lodge their appeals.
Now, the current government says it is expanding the partnership from eight countries to 23.
Previously, offenders were being returned to Finland, Nigeria, Estonia, Albania, Belize, Mauritius, Tanzania and Kosovo for remote hearings.
Angola, Australia, Botswana, Brunei, Bulgaria, Canada, Guyana, India, Indonesia, Kenya, Latvia, Lebanon, Malaysia, Uganda and Zambia are the countries being added – with the government wanting to include more.
Read more:
Govt vows to deport foreign criminals immediately
First migrants detained under returns deal with France
Theresa May’s hostile environment policy proved controversial. Pic: PA
The Home Office claims this is the “the government’s latest tool in its comprehensive approach to scaling up our ability to remove foreign criminals”, touting 5,200 removals of foreign offenders since July 2024 – an increase of 14% compared with the year before.
Home Secretary Yvette Cooper said: “Those who commit crimes in our country cannot be allowed to manipulate the system, which is why we are restoring control and sending a clear message that our laws must be respected and will be enforced.”
Foreign Secretary David Lammy said: “We are leading diplomatic efforts to increase the number of countries where foreign criminals can be swiftly returned, and if they want to appeal, they can do so safely from their home country.
“Under this scheme, we’re investing in international partnerships that uphold our security and make our streets safer.”
Both ministers opposed the hostile environment policy when in opposition.
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In 2015, Sir Keir Starmer had questioned whether such a policy was workable – saying in-person appeals were the norm for 200 years and had been a “highly effective way of resolving differences”.
He also raised concerns about the impact on children if parents were deported and then returned after a successful appeal.
In today’s announcement, the prime minister’s administration said it wanted to prevent people from “gaming the system” and clamp down on people staying in the UK for “months or years” while appeals are heard.
Despite Trump’s pro-crypto stance, Unicoin CEO says US banks continue closing accounts for crypto firms under “Operation Chokepoint.”
TRM Labs says the Embargo ransomware group has moved over $34 million in ransom-linked crypto since April, targeting US hospitals and critical infrastructure.
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