Digital Economy Council of Australia CEO Amy-Rose Goodey said the industry needs guidance that shows, “in real terms”, what is inside or outside the perimeter.
“This is exactly why we have seen Australian teams move offshore, operate in stealth or shut down while they wait for certainty,” Goodey said.
It comes after the federal member for Casey raised questions to the corporate regulator at the parliamentary hearing on the oversight of the Australian Securities and Investments Commission (ASIC).
MP Aaron Violi on Thursday put the spotlight on cryptocurrency and digital assets, asking the regulator about the progress of ASIC’s updated INFO 225 guidance.
“Recently ASIC has talked about taking a litigation-based approach to crypto and called for a comprehensive payments licensing reform to provide regulatory clarity for fintech firms … Wondering when we can expect [updated guidance] in relation to, in particular, Information Sheet 225?” he said.
In response, the corporate watchdog confirmed it is “very close” to issuing revised information regarding the regulatory perimeter for the cryptocurrency and digital asset industry – but it’s not expected to include further clarity around the definitions of financial products and services.
INFO 225 aims to help companies understand their obligations under the Corporations Act 2001.
Matt Poblocki, general manager of Binance Australia, told InvestorDaily clear and harmonised rules are crucial to fostering responsible innovation, protecting consumers and ensuring Australia remains competitive as a hub for financial services and technology.
“We believe a balanced framework – one that supports innovation while offering robust safeguards – will enable local and global players to continue building products that benefit Australian users. We look forward to continued constructive engagement with regulators and policymakers as the industry evolves,” Poblocki said.
ASIC chair Joe Longo said the updated information sheet aims to give the market ASIC’s best current understanding of what the law says and how the watchdog intends to apply it.
“Crypto assets, they disdained regulation, now we’re entering a period where the major players want certainty … They want to be regulated in the sense of giving investors some confidence that what they’re doing is happening within a regulated framework,” Longo said.
Violi noted the legal action being taken against Bit Trade, Finder Wallet and Block Earner.
“It sounds like you’re waiting until after products are launched and then the retail customers are exposed and then using court actions to retrospectively define the rules,” he put to ASIC.
“I’m just trying to understand ... If the regulations are delayed, but you’re taking legal action, how do those operations and people who are using those assets have the certainty that they’re operating within a defined scheme?”
In response, Longo said ASIC doesn’t set about regulating by enforcement.
“Our general approach is to first let the market know how we plan to administer the legislation and release regulatory guidance ... the financial products and financial services regime we have at the moment didn’t really contemplate digital assets in the way we’ve come to be familiar with now,” he said.
Longo admitted it was a complex and emerging area, made more challenging by the fact some cryptocurrency assets could be labelled under the current definition of financial products.
“Our understanding at the moment is that legislation, the approach they’re taking, will not involve revision of the law around financial products and services,” he said.
Goodey told InvestorDaily the grey area is one of the hardest challenges for local companies.
“ASIC has confirmed that Treasury’s upcoming legislation will not redefine what is or is not a financial product. That leaves the courts to decide, including the High Court in the Block Earner case. The definitions are foundational and should be given priority,” she said.
The revised information sheet is expected to take into account a range of consultations, led by ASIC commissioner Alan Kirkland.
Goodey acknowledged ASIC spent “real time” engaging with industry and said that effort is appreciated.
She said one of the most useful things ASIC could provide on the revised information sheet is practical worked examples that reflect how digital asset businesses actually operate.
“Industry is keen to see clear rules set out early, because that gives both consumers and innovators greater confidence. Everyone benefits when boundaries are well understood upfront rather than being clarified later through the courts,” she said.
As for how soon the updated guidance will be released, Longo said he hopes it’s well before Christmas.
“Sometimes people ask for more certainty, but that doesn’t mean they’re going to like what they hear,” Longo told the committee.
“I was going to make a joke about Christmas presents, but there’s only certain people that want crypto regulations for Christmas,” Violi said.
