On 21 March 2022, Treasury began consultation on a licensing and custody regime for crypto asset secondary service providers.

MinterEllison made a submission to the consultation paper on 27 May 2022 which supports:

• outlining of minimum standards of conduct by crypto asset secondary service providers (CASSPrs); and
• safeguards for consumers.

Technological innovations underlying the crypto industry are having a significant impact on all aspects of life and the economy, not just the financial industry. As crypto assets gain more mainstream awareness and acceptance, there is a significant benefit in having a properly regulated ecosystem that affords certainty to consumers, and legitimacy to players in the industry.

A well-regulated crypto market in Australia has the potential to promote Australia as a global hub for the fintech sector. It also has the added benefit of promoting consumer and investor protection, especially in light of the volatility which followed the TerraUSD collapse which erased around $45 billion in value in the crypto market.

MinterEllison's full submission outlines in further detail our:

• support for crypto asset secondary service providers being the primary subject of regulation (although we have suggested renaming them CASPs).
• support for the proposed custody regime for CASSPrs.
• recommendations for categorising tokens into categories: that is, means of exchange, investment, utility and hybrid.

Please contact our specialists below if you have any questions about our submission, or wish to stay in touch and track progress on regulation of the crypto sector. We have a strong commitment to working with Treasury and the industry to establish a sensible regulatory framework for CASSPrs that is fit for purpose, innovative and consumer focused.