Australia’s cryptocurrency industry has largely expressed support for the government’s draft crypto legislation, which was released last month. However, the sector has also submitted feedback to a Treasury consultation, highlighting the need for further clarification on several key aspects.
Caroline Bowler, the former CEO of crypto exchange BTC Markets, stated in a released statement, “The draft legislation, as it stands, leaves some critical questions unanswered.” She further elaborated, “We support the government’s intent to bring structure to the digital asset sector. But structure must come with clarity.”
“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 period, which commenced in late September. This consultation focused on draft rules intended to extend existing finance sector laws to crypto exchanges.
The proposed draft law aims to establish two new financial products under the Corporations Act: a "digital asset platform" and a "tokenized custody platform." Both of these would necessitate an Australian Financial Services License and require platforms to be registered with the Australian Securities and Investments Commission (ASIC).
Draft Law Requires Further Refinement, According to Swyftx
In its submission to the Treasury’s consultation, crypto exchange Swyftx argued that the draft law needs simplification and clarification. This is particularly true concerning the powers granted to the government and the operational guidelines for exchanges.
The company informed the Treasury that the draft law would grant a "high degree of discretion" to the Treasury and regulators, enabling them "to impose fundamental changes."
Swyftx recommended that the law should include a statement "to guide future regulatory interpretation" and clearly define the respective powers of the Treasury and ASIC in designating platforms and setting minimum operational standards.
Mandy Jiang, the executive director and financial chief at blockchain firm CloudTech Group, described the draft laws as a "significant step forward." However, she noted that they delegate "many critical details," including 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,” Jiang added.
Crypto Industry Identifies Gaps in Draft Legislation
Swyftx also pointed out in its submission that the draft laws lack sufficient clarity on how Australian crypto platforms can legally source liquidity from offshore exchanges. The company emphasized that this is crucial for establishing a "level playing field with international markets."
Furthermore, the company expressed concern that the proposed laws do not permit licensed financial advisers to offer advice on cryptocurrencies. Instead, they would only be allowed to advise on regulated platforms that offer crypto services.
Swyftx CEO Jason Titman told Cointelegraph that while the company supports the approach of regulating crypto under existing financial services law, 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 highlighted that the draft legislation fails to provide clarity on how to determine when a cryptocurrency is not a financial product. She also questioned how a platform could "be treated as a financial market when it doesn’t trade financial products? That’s a contradiction that needs resolution.”
She further added that the laws introduce multiple licensing categories "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 Expected by Early 2026
Vakul Talwar, general manager for Australia at Crypto.com, urged the Albanese Government not to delay, advocating for the swift amendment and introduction of a bill. He predicted that this could occur as early as March.
Talwar indicated that it is unlikely the bill would face significant delays due to debate and amendments, as it appears to 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 stated.
Edward Carroll, head of global markets at crypto investment firm MHC Digital Group, expressed a similar sentiment, suggesting 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.