Australian Senator Proposes Digital Asset Regulation Bill

Australia has been known for its progressive stance on cryptocurrency regulation. Recently, Senator Andrew Bragg submitted a private senators’ bill titled Digital Assets (Market Regulation) Bill 2023 to the Australian Parliament. The bill proposes regulatory recommendations for stablecoins, licensing of exchanges, and custody requirements to protect consumers and promote investment in the country’s cryptocurrency market.

The proposed regulatory changes aim to provide a regulatory framework for cryptocurrency exchanges, custody services, and stablecoin issuers in Australia. The bill is intended to protect consumers and promote investment while providing guidelines for reporting information by authorized deposit-taking institutions for the issuance and control of a central bank digital currency.

Senator Bragg provided further information for the submission of the private bill, criticizing the current Labor government for not following through on 12 recommendations relating to cryptocurrency regulation introduced by the Senate Select Committee on Australia as a Technology and Financial Centre in October 2021. Bragg highlighted that the Australian consumers had been left exposed to industry-wide events like the collapse of FTX by the inaction of the Australian government to provide regulatory clarity to the sector.

The proposed act also sets out various obligations and requirements for exchanges, custody services, and stablecoin issuers. These range from capital or minimum reserve requirements, segregation of customer funds, reporting on customer holdings, auditing, assurance, and disclosure arrangements.

The bill would require a person or business to hold a license granted by the Australian Securities and Investments Commission or a foreign license to operate a cryptocurrency exchange. This would also apply to cryptocurrency custody services and stablecoin issuers in Australia.

In contrast to the typical introduction of regulatory changes by Australian ministers, members of parliament can introduce private members’ or private senators’ bills, which can take months or years to pass through parliament. As a result, it may take some time before the Digital Assets (Market Regulation) Bill 2023 is passed into law.

Public consultation is currently ongoing in Australia over the classification of cryptocurrencies and various digital asset tokens, services, and platforms. The “token mapping” consultation paper was released in February, outlining basic definitions for the cryptocurrency sector.

The proposed bill by Senator Bragg is a significant step towards regulating the cryptocurrency sector in Australia, ensuring the protection of consumers and promoting investment in the country’s growing digital assets market. If passed, the bill would provide a clear regulatory framework for cryptocurrency exchanges, custody services, and stablecoin issuers to operate in Australia.


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US Senate Bill Proposes to Empower CFTC to Oversight Tokens & Digital Assets

On Wednesday, a group of Democratic and Republican members on the Senate Agriculture Committee introduced a bill that aims to give the Commodity Futures Trading Commission (CFTC) authority over the markets for Bitcoin and Ether, as well as any other digital assets that are considered to be commodities.

Senators who sponsored the bill include U.S Senate Agriculture Committee Chairwoman Debbie Stabenow, a Michigan Democrat, and Sen. John Boozman, a Republican from Arkansas.

The lawmakers said the bill would offer much required regulatory clarity to the cryptocurrency market by placing a major portion of its oversight under a single regulator.

The new bill seeks to give the CFTC direct oversight of cryptocurrencies that qualify as “digital commodities.”

It would also require firms offering crypto platforms to register with the CFTC, including exchanges, custodians, and brokers.

“One in five Americans have used or traded digital assets — but these markets lack the transparency and accountability that they expect from our financial system. Too often, this puts Americans’ hard-earned money at risk,” stated Stabenow, chairwoman of the Senate Agriculture Committee, which oversees the CFTC.

Such registration would come with requirements from the CFTC to ensure that crypto companies maintain adequate financial resources, avoid conflicts of interest, prevent abusive trading practices, maintain fair pricin, and cybersecurity protections, including other consumer protection measures.

The bill further acknowledged other financial watchdogs have a role in regulating cryptocurrencies that are not commodities but function more like securities or other payment methods.

Stabenow told media journalists that the bill is not designed to cover the entire crypto market or undermine the Securities and Exchange Commission (SEC) ‘s ability to oversee digital assets that function more like securities.

“We’re not defining what a security is. I have great confidence in Chairman Gensler to be able to use his authorities,” she elaborated.

The bill’s focus on Bitcoin and Ether as commodities fits with the views of SEC boss Gary Gensler, who in the recent past said most other cryptocurrencies are likely to be securities.

While Stabenow and Boozman stated that they wanted to move ahead with the bill as quickly as possible, they did not mention a precise timeline. The window for legislative action will come to an end before the November midterm elections.

Efforts Towards Crypto Regulation

The latest bill follows other lists of legislation proposed in the recent past to clarify the rules surrounding cryptocurrencies.

In June, as reported by Blockchain. News, U.S. Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) proposed a bipartisan cryptocurrency regulation bill that aimed to give the digital assets market much-needed definitions that would enable a regulatory framework to fall into place.

The proposed bipartisan Senate bill set the stage for establishing definitions for digital assets. The bill further proposed to create an advisory committee to develop guiding principles and to give regulatory authority for digital assets to the Commodity Futures Trading Commission (CFTC).

In March, the U.S. House of Representatives Patrick McHenry (R-N.C.) and Stephen Lynch (D-Mass.) introduced a bill that proposed the creation of a working group constituted of industry experts and representatives from the U.S. Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) to evaluate the current legal and regulatory framework around digital assets in the U.S.

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Aussie cyber spies to control critical infrastructure during ransomware attacks

Australia’s top cyber spies are set to gain greater powers in the event of ransomware or other cyber attacks on critical infrastructure.

The Australian Signals Directorate (ASD), a government agency in charge of cyber warfare and information security, would be able to take over control of critical infrastructure — including energy, communications and banking systems — under new legislation introduced into Parliament.

The legislation even includes health care and grocery businesses under the definition of critical infrastructure and imposes new positive security obligations.

For ASD operatives to provide assistance, operators from the affected infrastructure would have to report a serious cyber incident.

According to The Australian newspaper, the Critical Infrastructure Bill will be introduced to parliament, on Wednesday, with bipartisan support from the committee that examined it.

Home Affairs Minister Karen Andrews stated the measures proposed will ensure the safety of essential services that Australians rely on:

“Recent cyber-attacks and security threats to critical infrastructure, both in Australia and overseas, make these reforms critically important.”

But a coalition of Australian and international tech industry groups is opposed to the new law.  “Without significant revision, the bill will create an unworkable set of obligations and set a troubling global precedent,” they wrote in a joint letter.

There have been a string of high-profile ransomware attacks this year, including the Colonial Pipeline cyber attack in the United States in May, which forced governments around the world to rethink their vulnerabilities and highlighted crypto’s role in the attacks.

Another ransomware attack in May, on Australian meat processor JBS, pushed Australian lawmakers to take a tougher stance. A new Ransomware Action Plan, which was released last week, will allow Australian authorities to seize or freeze financial transactions in cryptocurrencies that are associated with cybercrime, regardless of the country of origin.

The Parliamentary Joint Committee on Intelligence and Security said the “threat of cyber security vulnerability and malicious cyber activity has become increasingly evident in recent years” with about a quarter of reported cyber security incidents affecting critical infrastructure organizations.



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Mark Cuban likens shutting off crypto growth to stopping e-commerce in 1995

Leaders in the crypto industry continue to speak up as the bipartisan $1 trillion infrastructure bill, known for implementing tighter rules on crypto businesses and expanding reporting requirements for brokers, passed the United States Senate. Billionaire investor and Bitcoin (BTC) proponent Mark Cuban is one of them.

Speaking to The Washington Post over the weekend, before the bill officially passed the senate, Cuban drew a parallel between the growth of crypto to the rise of e-commerce and the internet in general:

“Shutting off this growth engine would be the equivalent of stopping e-commerce in 1995 because people were afraid of credit card fraud. Or regulating the creation of websites because some people initially thought they were complicated and didn’t understand what they would ever amount to.”

Mark Cuban is a vocal advocate for crypto and decentralized finance. The Dallas Mavericks owner is known for enabling the Mavs to accept Bitcoin, Ether (ETH) and Dogecoin (DOGE) payments for tickets and merchandise items.

He also argued in May that crypto asset prices are increasingly reflective of real utility and demand and that the day will eventually come when crypto is “mature to the point we wondered how we ever lived without.”

Related: Senators introduce pro-crypto amendment to infrastructure bill; industry says it’s not enough

On Tuesday morning, the U.S. Senate passed the controversial bill in a 69–30 vote. The bill’s main focus is roughly $1 trillion in funding for roads, bridges and major infrastructure projects.

However, the bill caused serious concerns among the crypto ecosystem as it would implement tighter rules on crypto businesses, expand reporting requirements for brokers and mandate that digital asset transactions worth more than $10,000 are reported to the Internal Revenue Service (IRS).

Senator Pat Toomey, who was among the lawmakers that have written an amendment to the infrastructure bill to exclude certain crypto companies from the reporting requirements for brokers, said the new legislation imposes “a badly flawed, and in some cases unworkable, cryptocurrency tax reporting mandate that threatens future technological innovation.”