Australia poised to reform crypto as FTX opens up nation’s first branch

The crypto space is headed for some massive changes but one company is already miles ahead of the government.

The Australian government is poised to reform its current cryptocurrency rules in a bid to empower the estimated 800,000 Australians dabbling with digital assets.

On Monday, the treasury department released a consultation paper about the blockchain industry, the first of its kind for Australia.

With the number of investors in Australia increasing by 63 per cent in 2021 compared to the year before, the government believes it is time to add a framework to “support consumer confidence”.

A taxation system for cryptocurrency, protections for investors from unscrupulous dealers and methods of regulating digital banks, crypto exchanges and brokers are all on the table under the proposed changes.

The treasury department is now calling for feedback on its proposed changes.

Just two days prior to the announcement, a crypto company became the first ever to become a licensed entity in Australia.

Cryptocurrency’s popularity has risen exponentially in recent years. Here is a chart of bitcoin, the top performing crypto, over the last nearly decade.

The paper suggested that crypto service providers should need a license to operate.

It would be separate from the Australian Financial Services license, with service providers a CASSP license instead.

Global cryptocurrency exchange FTX is one step ahead of the proposed changes, revealing on Sunday that they had launched an Australian branch, complete with a licence already.

Its Australian division has an Australian Financial Services Licence after acquiring an unnamed company that previously held the license, according to FTX CEO Sam Bankman-Fried.

“The establishment of FTX Australia should provide all our local clients with the confidence of trading on a registered and licensed platform,” he said in a statement.

“As in other jurisdictions within which we operate, significant resources have been allocated to proactively engage with local regulators.”

Bitcoin’s price at time of writing. Note: This is in US dollars.

Financial Services Minister Jane Hume warned on Sunday ahead of the proposed changes: “The government can’t guarantee your crypto any more than it can guarantee a painting or a share in a company, and nor should it.

“But we can make sure Australian exchanges, custodians and brokers – Australian players in the crypto ecosystem – work within a regulatory framework that is better, safer and more secure.”

Treasurer Josh Frydenberg flagged the reforms in December, announcing that the Morrison government would look to make the biggest changes to the sector in 25 years.

The reforms include a number of recommendations from Senator Andrew Bragg’s parliamentary report into the sector, which found Australia’s current regulations were not fit for purpose.