Australia’s regulatory approach to cryptocurrency and digital asset exchanges has been characterized by a series of parliamentary inquiries and conflicting consultations, culminating in legislative inaction and regulatory uncertainty.
The lack of a clear legislative framework has forced the Australian Securities and Investments Commission (“ASIC”) to adopt a reactive "regulation by enforcement" posture, shifting from its initial focus on providing guidance to actively pursuing enforcement actions against digital asset businesses. Recent enforcement actions in 2024, including cases against prominent cryptocurrency exchanges and wallet providers, highlight the challenges faced by both regulators and businesses.
We argue that continuing down the path of "regulation by enforcement" will lead to further uncertainty, stifle innovation, and continue to hinder the Australian digital assets sector.
