Crypto sector lobbies for political support as sector weighs up response to ASIC regulation

The crypto industry is mobilising ahead of the looming election to lobby for political backing, setting up a potential clash with ASIC over plans to regulate the sector.

John O'Loghlen is head of Coinbase Australia, the local arm of the US crypto giant. Picture: Max Mason-Hubers

Australia needs a “pro-crypto” successor to outgoing financial services minister Stephen Jones, with Coinbase Australia’s boss warning the latest regulatory interventions risks sending activity overseas.

But former regulators have cautioned any calls for bespoke regulation of crypto assets risked overcomplicating oversight and would depart from previous approaches to new financial assets.

This comes as the Coalition is lining up alongside the crypto industry ahead of the looming election, in what may prove a re-run of the industry’s support for Donald Trump in the 2024 US election.

Coinbase Australia boss John O’Loghlen said he was concerned about the regulatory landscape confronting crypto products in Australia after recent moves to force the sector to secure licensing by the corporate regulator.

In December, the Australian Securities & Investments Commission told the crypto industry its various operators and coin-issuers that applied for an Australian Financial Services Licence would be given a grace period, free from enforcement, while those that failed to apply would face demands to explain their reasoning.

This is pending ASIC’s finalisation of its crypto oversight rules in mid-2025.

Mr O’Loghlen said he supported ASIC’s engagement with the sector, but noted Coinbase and other operators wanted “complementary” legislation to come in alongside any regulatory rule.

Mr O’Loghlen said the current rules were “quite burdensome”, noting the industry was instead hopeful Australia would follow the path of lighter touch countries.

He said the current rules risked driving away businesses and challengers from Australia “many of which are very successful”.

“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,” he said.

ASIC chair Joe Longo appears at the additional Budget Estimates 2024-25 Economics Legislation Committee at Parliament House in Canberra. Picture: Martin Ollman/NewsWire

The ASIC intervention comes as legislation that might set rules around the crypto industry has languished, since being first mooted in 2023 by the Albanese ­government.

Mr O’Loghlen said he hoped any future government would be more “pro-crypto” than Mr Jones, who is retiring from politics.

ASIC chair Joe Longo has also made his views clear on crypto, telling a recent parliamentary hearing he thought the asset class was “very risky”.

Naming both Labor and Liberal figures, Mr O’Loghlen said there were crypto supporters on both sides of the house.

“We would hope in light of everything happening globally it’d be someone who’s more supportive of digital assets,” he said.

He said 2025 was set to be a “pivotal year” for crypto, with the incoming Trump administration paring back controls over the sector in the US.

He noted Coinbase, with its global operations, had “optionality” and may look elsewhere if Australia proved less fruitful. The business runs a lean operation in Australia, headed by Mr O’Loghlen, a former investment banker and senior figure in Chinese tech and finance giant Ant Group.

“I haven’t heard of companies and organisations yet up and leaving to the US because of the incoming regime,” Mr O’Loghlen said. “If business were to become too challenging here we may have to reallocate assets.”

Opposition financial services spokesman Luke Howarth. Picture: Matthew Poon

While Coinbase doesn’t donate to any party, the risk is growing that the crypto industry moves to back the Coalition or independents, who may hold the balance of power, in a repeat of the US election campaign in which Mr Trump was backed by a string of “crypto-bros”.

Already members of the sector have looked to lobby the Coalition, as well as members of the teals.

Opposition financial services spokesman Luke Howarth said the Coalition, if elected, would move quickly to put in place “fit-for-purpose” legislation to govern the crypto sector.

He said these laws would ensure any regulation “keeps Australia up with the rest of the world and provides much-needed regulatory certainty”.

“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,” Mr Howarth said.

“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.”

FEX group executive Dan Crennan at FEX offices in Sydney. Picture: Britta Campion

Former ASIC chair Daniel Crennan said any light-touch regulation of crypto would be a departure from the previous treatment of Australian Carbon Credit Units in 2011, which are also regulated as a financial product under the Corporations Act.

Mr Crennan, who is also a group executive at financial market FEX Global, said the protective measures under established regulatory frameworks, rather than bespoke legislation for crypto products, was the best path forward.

“If digital assets companies wish to operate without the regulatory licensing or consumer benefits which exist in Australia, which would derive from crypto being a financial product, perhaps they can operate in other countries that don’t possess a rigorous regulatory framework,” he said.

Originally published as Crypto sector lobbies for political support as sector weighs up response to ASIC regulation