- Alex Saunders, CEO of a popular crypto blog, is making a bid to pave the way for crypto regulation in his native Australia
- His plan involves helping the Australian government establish an independent industry body for assessing crypto companies’ legitimacy
- As Binance makes its entry into the country this week, Saunders says regulation could pose a hindrance
Between restless nights with his three-week old newborn, Alex Saunders is preparing his pitch to the Australian Treasury.
In the coming months, he is hoping a series of meetings with top officials will be enough to soothe the government’s increasingly sceptical attitude towards crypto, and help them meticulously distinguish between the good, the bad, and the ugly.
Still, it’s been a trying month for Aussie crypto firms. A crypto fund manager is in court for misplacing millions of dollars of a client’s funds, and two exchanges have been suspended for drug trafficking links. It’s part of a wider wave of harsher scrutiny being placed on the murkier corners of crypto, and according to Saunders, it’s heading towards indiscriminate shutdowns.
“First, banks cracked down on crypto exchanges. Then there was a real crackdown on KYC. Now, they’re cracking down on businesses,” Saunders told The Block, pointing to the Australian Stock Exchange’s shutting down of Bitcoin Group’s attempt to list.
“[Small crypto] businesses are also worried about being overtaxed.”
The country already hosts an astounding number of crypto exchanges for a buzzing community of enthusiasts (and gung-ho investors), alongside globally-recognised ICO companies relying on Saunders – now a local celebrity – to showcase their talent.
Saunders – a pharmacist-turned-crypto veteran – has a plan. He wants to become a government partner to provide the regulatory framework for crypto. In doing so, he can help provide a “tick” of approval for legitimate crypto businesses (including exchanges) complete with audits and transparency checks.
“The [government] doesn’t understand it all. For them, BitConnect [a renowned scam] is the same as every other ICO.”
Saunders also wants to show the government his large database of the country’s crypto startups, distinguishing between the “dodgy” and the legitimate based on his team’s due diligence efforts.
His plan also involves convincing the government to implement a sandbox period, trialing Saunders’ proposal of relaxed regulation.
“We’ve got a lot of trust and power from the community from what we’ve done.”
It’s important for Saunders personally too, as he gears up to help launch Australia’s first security token platform alongside running his blockchain education firm.
It’s a tough gig, but spectators are optimistic that the government will be receptive given its leader’s enthusiasm for blockchain technology.
“[Australian Prime Minister Scott] Morrison is very close to fintech, he’s connecting industry to tech,” said John Ryan, Senior consultant at the Nomura Research Institute, who says the country is already a hub of “innovation.”
But while Morrison is bullish on blockchain, clear cynicism remains around crypto amid an already “very conservative” approach towards financial regulation under the AUSTRAC laws.
“The worst case scenario is if they say all ICOs are securities,” says Saunders. Doing so could put everything from crypto YouTubers to PowerLedger in legal breach.
Anthony Sassono, who runs information site EthHub from Melbourne, added:
“I think that the government needs to strike the right balance between regulation and letting teams innovate in the highly experimental cryptocurrency space,” he said.
“If they create a situation where companies/startups feel like they’re being choked by unfair regulation then Australia may lose this business to more regulation-friendly countries.”
The stakes are high. Australia could become the next Malta – a breeding ground for the next wave of technology with regulatory open arms. Or, Saunders says, “there could be a crackdown on everything.”