How crypto compliance will evolve in Australia

Australian cryptocurrency compliance will most likely evolve from a registration model to a licensing model and ESG goals will be high on the to-do list for senior officials, according to Caroline Malcolm, head of international policy at Chainalysis.

During the Chainalysis Links event in Sydney, Malcolm discussed several developments being made for cryptocurrency compliance in Australia that will most likely emerge over the next 12 months.

She told attendees, “We can expect developments in terms of having a specific regime for the sector. A lot of that is going to focus on perhaps a shift from a registration model to a licensing model.

“Some more requirements around good governance in terms of providers of services in this space, and we're also increasing obligations in terms of disclosures, particularly on the consumer side.”

Malcolm said ESG governance within Australia hasn’t been discussed thoroughly yet but will most likely be a hot topic once the Albanese government settles into parliament.

She said market integrity is an interesting space, “We haven't seen a lot of specific activity in this area yet when it comes to cryptocurrency. But it is something where we're going to see a lot more activity, thinking about some of those traditional concepts around market manipulation, for example.

“Bringing those into the crypto space and starting to have some obligations there in terms of whether it be washed trading, front running, insider trading, for example.”

Market integrity is the next layer for consumer protection, Malcolm said, in terms of going beyond not just looking at advertising and promotions.

“If we think about the UK and what's going on there, they have taken an approach which brings crypto assets into a very similar regime as they have for other financial products when it comes to advertising and promotion."

Malcolm said she expects to see something not so different here in Australia in terms of having a focus on crypto advertising and promotions.

“It's not about banning advertising or banning the sale of particular assets to particular parts of the community. But about making sure there is no misleading advertising, there are disclosures about what you're buying when you're getting into this sector and making sure those risks are as clear to you as the opportunities are,” she explained.