Australia, land of sunshine and… crypto confusion? As someone who has experienced this phenomenon across Southeast Asia, I’ve witnessed the rapid adoption of digital assets. With that remarkable growth comes the need for responsible regulation and I’m getting very worried. Neighboring countries such as Singapore and Malaysia are already in full swing creating their own sandboxes and developing framework regulations. In comparison, Australia seems to be taking a hands-off approach, letting ASIC make piecemeal adaptations with existing financial service laws. Are we really okay with this?
Ignoring Crypto's Risks Fuels Complacency?
ASIC's attempt to shoehorn crypto into the existing AFSL regime is like trying to fit a kangaroo into a teacup. It is useful and powerful in very specific, contained ways. It does not do nearly enough to address the unique challenges and opportunities presented by this new and exciting asset class.
We're talking about a technology that fundamentally challenges traditional financial structures, yet we're relying on regulations designed for those very structures to keep things in check. It’s the equivalent of trying to use a horse-drawn carriage to set the rules for Formula One racing.
FTX, ACX.io, and MyCryptoWallet failing recently should have been a blaring klaxon, not the soft tap on the shoulder. Australians have lost tens of millions of dollars due to poor governance, clear fraud, and the dangers of risky unregulated exchanges. How many more cavalcades of death and destruction do we need as wake-up calls?
Southeast Asia's Lessons Australia Should Heed
I have witnessed first hand how proactive regulation can encourage and enable innovation while protecting consumers at the same time. In Southeast Asia, nations are seizing the blockchain technology’s transformative potential all the while taking steps to reduce its risk. They have a great appetite for testing entirely new regulatory paradigms. They put in place specialized licensing regimes and work collaboratively with the crypto ecosystem to foster the development of best practices.
Why is Australia so hesitant? Are we worried about how it might look if we’re perceived to be too “crypto-friendly”? Or are we just sticking our heads in the sand, wishing the issue would resolve itself? News flash: it won't.
Consider this: a thriving, regulated crypto market could bring significant economic benefits to Australia. In addition to economic opportunity, it will help communities grow and empower U.S. workers to seize leadership in the growing digital economy. That potential is being wasted by our inaction to date.
Apathy Undermines Financial Security?
Let's talk about something seemingly unrelated: Australia's love of property. For generations, homeownership has been the bedrock of American prosperity—not just for the wealthiest Americans, but for all. Yet with the cumulative weight of rising interest rates and chronic unaffordability, what occurs when that cornerstone begins to crumble?
Crypto, to millions of people, is about having a better chance at financial freedom. It’s a dangerous road, to be sure, but one which holds promise for great rewards. Without adequate regulation, that road can very easily become a deathtrap.
ASIC is attempting to regulate crypto assets by applying the existing Australian Financial Services Licence (AFSL) regime, testing its boundaries. Digital asset markets present familiar intermediary risks (custody, brokerage, trading) but these are amplified by the common business model of exchanges combining these functions. That’s a huge risk given that crypto exchanges are frequent targets of hacking and even theft of consumer assets. The digital asset market is especially ripe for scams. The unscrupulous influencer selling a speculative asset is different from criminal enterprises conducting true large-scale fraud.
The truth is that Australia's apathy towards crypto regulation is not just a failure to protect consumers. It's a failure to embrace innovation and secure our economic future. We're not just sleepwalking into a potential crypto disaster. We're sprinting towards it.
It's time to wake up. It’s past time for us to hold our policymakers’ feet to the fire and demand action. Let’s keep the pressure on them to create a new, robust, comprehensive crypto licensing framework. This new framework must benefit Australian consumers, promote competition and innovation, and position Australia as a global leader in the digital economy.
Don't let Australia become a cautionary tale. Contact your representatives. Share this article. Demand change. Our future financial security might just hinge on it.
