Coinbase Concerned About Ongoing Enforcement Action in Australia, Plans Careful Approach

• Coinbase exchange worries about crypto enforcement action employed by Australia’s securities commission
• An ASIC exec has suggested that regulators will go after more firms that violate the country’s rules
• ASIC tends to revisit lost cases and appeal court judgments not in its favor

Major cryptocurrency exchange Coinbase has expressed concern about the crypto regulatory climate in Australia, with rules executed through enforcement action. According to Coinbase, the move is detrimental to Australia’s crypto sector especially as its crypto community awaits draft regulation.

While cryptocurrency is not illegal in Australia, authorities are going after crypto endeavors. Nevertheless, adoption is relatively healthy, with 17% of the country’s population dealing in digital assets. With Australia’s adoption level higher than the global average of 15%, Australia is a prime spot for popular crypto services, including financial solutions. With time, the country’s crypto casino sector could thrive even more, with a potential proliferation of cryptocurrency casinos offering great bonuses and heightened security. They are also commonly accepted at the fastest withdrawal casinos, which are always appreciated by players looking for immediate access to their winnings.

Coinbase Indicates Careful Approach in Australia

In a recent CoinDesk interview, John O’Loghlen, the Asia-Pacific Managing Director for Coinbase, said the company hopes to avoid “regulation through enforcement” and has already engaged in “healthy interactions” with regulators. O’Loghlen also spoke on adoption and the exchange’s plan to operate within lawful limits:

“There’s clearly a nice macro theme and ongoing uptick in consumer adoption with the recent approvals of spot ETF products in Australia and the US and we want to make sure we’re not kind of muddying the waters in this gray zone prior to the draft legislation.” 

Enforcement Action in Australia

At a June event hosted by Australia’s crypto policy body, Blockchain Australia, representatives of the Australian Securities and Investments Commission (ASIC) said there will be more enforcement action against illegal crypto entities. Speaking to attendees of the Digital Assets: Anchoring the Digital Economy event, ASIC’s senior executive leader of digital assets, Dr Rhys Bollen, warned crypto service providers to comply with current regulations. 

Bollen asked service providers several pertinent questions about regular reviews of tokens, products, and services offered on their platforms. He said:

“How recently have you consulted with your lawyers about where the law currently sees the most current understanding based on cases over the last six months or so? If you haven’t done that in the last four months you need to consider where you are.”

ASIC to Appeal Lost Cases

The ASIC executive also said the Commission plans to appeal recent court judgments that favor crypto entities. In June, a judge ordered the ASIC to pay legal costs for crypto-based startup Block Earner. Judge Ian McNeil Jackman, who presided over the case, criticized the ASIC for a “misleading media release” and also ruled that the startup will not pay a penalty for its yield-bearing Earner product because Block Earner tried to engage with regulators regarding its products and services.

In May, an Australian Federal Court delivered a ruling that mostly favored the ASIC against BPS Financial Pty Ltd over its Qoin project. However, the judge disagreed that the Qoin Blockchain and Qoin Wallets are one single scheme that requires a license. Bollen’s recent comments suggest that the ASIC will appeal both judgments. Currently, existing crypto service providers, including exchanges, financial services, and crypto gambling platforms, may begin to exercise some caution until the sector gains regulatory clarity.