Tuesday, 14 March 2023

Treasury has launched its foundational steps for regulating the crypto ecosystem.

Following the Government’s 2022 announcement, Treasury recently released a consultation paper seeking stakeholder feedback on crypto token mapping. This came on the heels of widespread calls for regulation and licensing around digital assets, and it is noted as the first step in a considered approach to the reform.

Following respective submissions to Treasury, crypto specialist, Paul Hewson, and fellow industry leaders, Caroline Bowler (CEO, BTC Markets) and Michael Bacina (Partner, Piper Alderman), spoke with The Australian about the approach to crypto regulation. For Australia to become a major crypto hub, they noted the imperative for attempts at regulation to coincide with a comprehensive understanding of the crypto technology itself.

The token mapping exercise aims to understand the key activities and functions of digital asset products and map these against existing regulatory frameworks. It is an attempt to provide clarity on the principles used for regulation of traditional financial products that may have application across cryptocurrency and identify where, and how, innovation is required.

KordaMentha made its submission to Treasury, calling on recent experience restructuring high-profile crypto asset exchanges, including FTX and Digital Surge in Australia and Zipmex in Singapore. The response highlights key considerations and recommendations for turning this regulatory lens to digital assets. The focus is on improving the transparency of crypto asset exchanges and developing robust and effective regulatory policy to enhance consumer protections, provide clear guidance for businesses and facilitate ongoing growth and innovation within the industry.

Download KordaMentha’s full response to the Treasury consultation paper here.

Read the full article, as published in The Australian, here.