Regulation
Global Crypto Exchange Coinbase Concerned About ‘Continued Regulation Through Enforcement’ in Australia
Nasdaq-listed cryptocurrency exchange Coinbase (COIN) is concerned about “ongoing regulation through enforcement” that is “not helpful to the overall direction of the industry” in Australia ahead of the expected draft legislation, senior executives at the cryptocurrency exchange told CoinDesk in an interview.
“We want to avoid continued regulation through enforcement, given all the healthy interactions we’ve had (with regulators) in recent times, which didn’t exist before,” Coinbase’s Asia-Pacific general manager said. John O’Loghlen he said in an interview.
Australian Treasury previously announced plans publish by the end of 2024 a draft law establishing licensing and custody rules for cryptocurrency providers.
“There is clearly a nice macro theme and continued increase in consumer adoption with recent approvals of spot-ETF products in Australia AND the United States and we want to make sure that we don’t muddy the waters in this gray area before the bill.”
However, Australia’s market regulator, the Australian Securities and Investments Commission (ASIC), has not slowed down in its approach to the sector.
Last month, Dr Rhys Bollen, senior digital assets executive at ASIC, warned an audience of industry insiders to align with precedents set in recent cases brought against crypto entities.
“We have been very vocal about our concerns that ASIC might continue to do scrutiny,” during “four or five roundtables” in recent weeks, O’Loghlen said, though he commended the new ASIC team for “reaching out to all the industry players” … “proactively” and “having conversations over coffee with about 50 groups.”
In July, a parliamentary committee report recommended that the Australian Government recognise that ASIC has “failed to fully meet its regulatory mandate.” Earlier this month, Coinbase hired David Menzwho has held senior positions at ASIC and the Australian Treasury’s Digital Assets and Crypto Unit, as APAC Policy Manager.
“Our current policy priority is to continue to foster those relationships with both ASIC and Treasury,” Menz said. “We will be very engaged in this response to the draft Exposure Bill when it is published.”
Menz also said that Coinbase hoped that “it wasn’t just a thin licensing framework,” although that would be “better than nothing.”
Within this framework, “we support a Australian Financial Services Licence (AFS)“to conduct cryptocurrency-related business and hopeful that staking services would be included, indicating that “no licensed entity should stake customer assets without” the customer’s permission. “We would encourage this type of valuable detail to be included in the draft exposure legislation,” Menz said.