Australia’s cryptocurrency sector is calling for a “pro-crypto” successor to outgoing financial services minister Stephen Jones, warning that recent regulatory measures could drive the industry offshore.
John O’Loghlen, head of Coinbase Australia, voiced concerns over the regulatory landscape, particularly after recent moves requiring crypto businesses to secure licensing from the corporate regulator.
Former regulators, however, have warned against bespoke regulations for crypto assets, arguing that such measures could unnecessarily complicate oversight and depart from traditional approaches to new financial products.
Crypto Regulation in Focus Ahead of Election
The debate intensifies as the Coalition positions itself alongside the crypto industry ahead of the upcoming election, echoing the sector’s backing of Donald Trump in the 2024 US presidential race.
In December, the Australian Securities & Investments Commission (ASIC) informed the crypto sector that operators and coin-issuers applying for an Australian Financial Services Licence (AFSL) would receive a grace period free from enforcement. However, those failing to apply would be required to justify their decision. ASIC is set to finalize its crypto oversight rules by mid-2025.
Industry Pushes for Balanced Regulation
While supporting ASIC’s engagement, O’Loghlen stressed that Coinbase and other firms sought “complementary” legislation to work alongside regulatory measures.
“The current rules are quite burdensome,” he said, advocating for a more flexible approach similar to jurisdictions with lighter regulations. “We want to make sure we’re really involved and ASIC are listening to suggestions from the industry and not putting out the Info Sheet as a primary record and saying we told you so.”
O’Loghlen warned that stringent regulations could deter innovative businesses from operating in Australia. “Many of which are very successful,” he added.
Political Divide Over Crypto Oversight
Legislation that could establish clear crypto industry rules has stalled since first being proposed by the Albanese government in 2023.
ASIC Chair Joe Longo has been outspoken on the issue, telling a recent parliamentary hearing that he views cryptocurrency as “very risky.”
O’Loghlen noted that crypto has support on both sides of the political spectrum. “We would hope in light of everything happening globally it’d be someone who’s more supportive of digital assets,” he said.
The sector is closely watching the US, where the incoming Trump administration is rolling back regulatory controls over crypto. O’Loghlen acknowledged Coinbase’s global reach and warned that if Australia’s environment became less favorable, the company might shift its focus elsewhere.
“I haven’t heard of companies and organisations yet up and leaving to the US because of the incoming regime,” he said. “If business were to become too challenging here we may have to reallocate assets.”
Coalition Promises Regulatory Clarity
While Coinbase does not contribute to political parties, some fear the crypto industry may shift its support towards the Coalition or independent candidates who could hold key parliamentary influence—mirroring the sector’s role in the US election, where Trump received backing from prominent cryptocurrency figures.
Several industry members have already engaged with the Coalition and independent MPs to advocate for a more favorable regulatory framework.
Opposition financial services spokesman Luke Howarth said a Coalition government would implement “fit-for-purpose” legislation to provide much-needed clarity for the crypto sector.
“Fit-for-purpose regulation won’t just protect people who choose to invest in crypto, it will also drive certainty and investment in businesses utilising the underlying blockchain technology,” Howarth said.
He accused the current government of failing to provide clear guidance, leading to ASIC stepping in. “Now ASIC is frontrunning comprehensive reform and the government is culpable. The Albanese government has lost control and now ASIC is playing policymaker on crypto.”
Former ASIC Chair Daniel Crennan warned that a more lenient regulatory approach for crypto would mark a departure from how Australia previously handled financial products, such as the 2011 regulation of Australian Carbon Credit Units under the Corporations Act.
As Australia navigates its crypto regulatory framework, the industry remains at a crossroads, balancing innovation with the need for effective oversight.
