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Coinbase's Asia-Pacific Managing Director said the exchange is concerned about "ongoing regulation through enforcement" ahead of expected draft legislation for the sector.
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Australia's Treasury is planning to introduce a draft legislation for the crypto sector by the end of 2024.
Nasdaq-listed cryptocurrency exchange Coinbase (COIN) is concerned about “ongoing regulation through enforcement,” which is not “helpful to the overall direction of the industry” in Australia ahead of expected draft legislation, senior executives of the cryptocurrency exchange told CoinDesk in an interview.
“We want to avoid ongoing regulation through enforcement given all the healthy interactions we've had (with regulators) in recent times which didn’t exist earlier,” Coinbase’s Asia-Pacific Managing Director John O’Loghlen said in an interview.
Australia's Treasury previously announced plans to release draft legislation by the end of 2024 covering licensing and custody rules for crypto asset providers.
“There’s clearly a nice macro theme and ongoing uptick in consumer adoption with the recent approvals of spot-ETF products in Australia and the U.S. and we want to make sure we're not kind of muddying the waters in this gray zone prior to the draft legislation.”
However, Australia’s market regulator, the Australian Securities and Investments Commission (ASIC), has not slowed down in its approach toward the industry.
Last month, Dr Rhys Bollen, senior executive leader of digital assets at ASIC, warned an audience of industry goers to fall in line with the precedents set in the recent cases it has filed against crypto entities.
ASIC has sued Binance Australia and social investing platform eToro, while major banks of the nation have imposed partial restrictions on crypto citing scams and are appealing recent judgments that, at least in part, were in favor of crypto entities such as Block Earner and BPS Financial Pty Ltd (BPS) .
“We've been quite vocal with our concerns about ASIC potentially just continuing to make enforcements”, during the “four or five roundtables” in recent weeks, O’Loghlen said, even though he complimented a new ASIC team for “very much reaching out to all industry players” … “proactively” having “a coffee conversation with 50 or so groups.”
In July, a parliamentary committee report recommended that the Australian Government recognize that ASIC has “ comprehensively failed to fulfil its regulatory remit .” Earlier this month, Coinbase hired David Menz , who held senior positions at ASIC and the Australian Treasury’s Digital Assets and Crypto Unit, as its APAC Policy Manager.
“Our current policy priority is to continue to foster those relationships with both ASIC as well as Treasury,” Menz said. “We will be putting a large amount of effort into that response to exposure draft legislation when it does come out.”
Menz also said Coinbase was hoping “it's not just a bare bones licensing framework” even though that would be “better than none at all.”
Within the framework, “we are supportive of an Australian financial services (AFS) licence ” to conduct crypto-related business and hopeful for inclusion of staking services, indicating “no licensed entity should stake customer's assets without” customer permission. “We would encourage that sort of good detail to be included in the exposure draft legislation,” Menz said.
Read More: Australia's Treasury to Include Stablecoin Rules in Crypto Bill Draft, ASIC's Warning For Crypto Entities
UPDATE (July 31, 16:30 UTC): Reflects engagement with regulators in headline.