The Australian government should redirect its attention away from the ‘Wild West‘ crypto narrative

The CEO of Blockchain Australia, Steve Vallas, has urged for more regulatory engagement in the Australian crypto industry, while rejecting the overarching notion of crypto in Australia being the "Wild West."

Vallas was one of several famous speakers invited to an online debate sponsored by Senator Andrew Bragg, Chair of the Select Committee on Australia as a Technology and Financial Centre, on Friday.

While the CEO of Blockchain Australia believes Australia's crypto and blockchain scene is generally "well placed," he believes it has slipped behind where it could be, in part owing to a lack of regulatory clarity and participation.

Given what has been going on in the US Senate about crypto-tax-reporting fighting over the last week, this substantially echoes the present opinion in the US.

“Fundamentally, the difficulty for us has been a lack of guidance,” Vallas explained. “With regard to regulatory frameworks as they currently exist, we have not been provided with enough guidance.”

The industry body's chief emphasised the Australian crypto scene's growth and innovation, which has helped it mature since the days of ICOs (Initial Coin Offerings). And he called for the creation of a “graduated, fit-for-purpose regulatory framework” – he wants to see regulators from around the country come together and figure it all out.

Vallas also hi-ghlighted Blockchain Australia's recent proposal for a "safe harbour" clause to be established in order to provide short-term stability for crypto and blockchain enterprises while fair and adequate legislation are developed.

Chloe White, the managing director of Genesis Block, an advising organisation specialising in digital asset policy, also spoke to the committee. Part of the problem, according to White, is that regulators, at least in Australia, prefer to pay attention to the industry primarily during the more hyped-up moments of crypto.

“During quiet periods, a lot of that talent and expertise is allowed to dissipate,” she explained.

“This is the third time we've started to try to understand what exactly this technology does, whereas in other jurisdictions, they've recruited specialists into the public service or set up multi-agency task forces that have continued to consult industry and develop policy during those quiet periods.

“We've been in a pretty reactive position in terms of policy guidance and analysis,” White continued.

Taking aim at the 'Wild West'

Vallas said in his opening remarks to the committee that the “Wild West” myth surrounding the crypto business is still prevalent. He was speaking about how it is perceived by Australian governments and regulators, though it is likely that other governments and regulators across the world have a similar opinion.

“We fight that narrative because we can happily declare that the industry is seeking clarity,” Vallas added. “We are asking the regulators to interact with us, both publicly and privately.”

Senator Marielle Smith, Deputy Chair, sought clarity from Blockchain Australia CEO on the Wild West perception and where it originated.

Vallas responded that it derives from crypto ecosystem legacies, specifically from the ICO period in crypto in 2017/2018.

This was a moment when many crypto companies came and went, aiming to capitalise on buzz and promise, sometimes with little to no basic substance.

“The landscape as we know it today is very different,” Vallas remarked. “We don't see an appetite for ICOs in Australia, and we don't see regulators allowing it to happen again, so we have a fresh chapter, but the story has persisted.”

“When people don't comprehend the environment, they have a tendency to lean in on the ‘Wild West,' to lean in on devious and terrible characters.

“All I have to go on are the facts that have come to light. Businesses who track transactions on chain tell us that fraud, unscrupulous activity, and poor behaviour account for a very small number of transactions. But it's an ongoing conversation, and I anticipate it to continue.”

Michael Bacina, a digital legal specialist and Piper Alderman partner, added to the Wild West-themed discussion.

“There is this prevalent news that the horrible stories in the Wild West will gradually fade away,” he explained. “Mr Vallas did not mention it, but it was used in connection with the Silk Road in the early days of Bitcoin. According to recent study, this is changing. Chainalysis is one company that the committee might go at for statistics on what is going on in the market in terms of bad behaviour.”

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