Australia’s crypto industry largely supports the government’s draft legislation released last month, but still responded to a Treasury consultation with requests for more clarity.
“The draft law, as it stands, leaves several critical questions unanswered,” Caroline Bowler, the former CEO of Crypto Exchange BTC Markets, said in a statement.
“We support the government’s desire to bring structure to the digital asset sector. But the structure must have clarity.”
On Friday, the Treasury concluded its consultation, which began in late September, on Draft Laws expanding financial sector laws on crypto exchanges.
The draft law will create two new financial products Under the Corporations Act: a “digital asset platform” and a “tokenized custody platform,” both of which will require an Australian financial services license and for platforms registered with the Australian Securities and Investments Commission (ASIC).
Draft Law needs more work: SWYFTX
In its submission to the Treasury consultation, Crypto Exchange Swyftx said the draft law needed “simplification and clarification,” particularly on its powers provides government and how exchanges might work.
The company told the Treasury that the draft law would allow “a high degree of discretion” by the Treasury and Regulators to “impose fundamental changes.”
Swyftx said the legislation should contain a statement “to guide future regulatory interpretation” and clearly clear the powers of the Treasury and ASIC to designate platforms and set minimum standards.
Mandy Jiang, the executive director and head of finance at blockchain firm CloudTech Group, said the draft laws were a “significant step forward” but delegated “many critical details,” such as licensing standards and safeguards, to ASIC for future guidance.
“Consequently, whether this legislation achieves its stated objectives of boosting innovation and supporting sector growth and competition will largely depend on the timeliness and quality of ASIC’s forthcoming guidance,” he added.
The Crypto industry sees several gaps in the draft laws
Swyftx added in its submission that the draft laws also do not provide enough clarity on how Australian crypto platforms are legal source of liquidity From offshore exchanges, which it said is critical for “a level playing field with international markets.”
The company is also concerned that the laws do not allow licensed financial advisors to advise on cryptocurrencies, only allowing them to advise on regulated platforms that offer crypto.
SWYFTX CEO Jason Titman told Cointelegraph that he supported the strategy of regulating crypto under the financial services law, but the “primary concerns now are to ensure that Australian consumers are adequately protected and that the local industry can compete on a level playing field.”
Bowler said the draft law does not provide clarity on how to determine if a cryptocurrency is not a financial product or how a platform can be “treated as a financial market when it does not trade financial products? That is a contradiction that needs to be resolved.”
He added that the laws also introduce many licenses “without clearly expressing the consumer benefit or the specific risks it seeks to address.”
“Regulation must be proportionate and fit for purpose. Without that, we risk developing a regime that burdens businesses but does not necessarily enhance consumer protection.”
Legislation is expected for early 2026
Crypto.com’s general manager for Australia, Vakul Talwar, said the Albanian government should not “take their foot off the throttle” and work to amend and introduce a bill “as soon as possible,” which he predicted could happen as early as March.
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He added that it is unlikely that the bill will be held through debate and amendments, because it “looks like it will largely have bipartisan support.”
“We want to see the law finalized as soon as possible and, in our opinion, it definitely needs to happen by the end of 2026,” he added.
Edward Carroll, the head of global markets at Crypto investment firm MHC Digital Group, said that “the reality is that we probably won’t see legislation introduced before the end of 2026.”
“There is still significant work to be done in translating consultation feedback into a workable bill, but the sooner the rules are formalized, the sooner businesses can plan with confidence,” he added.
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