Category: Australia

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Australia Bitcoin Crypto News Regulation

Aussie Government Prioritises ‘Token Mapping’ for New Regulatory Framework

The Australian government has released a statement indicating that it will begin a review as to how digital assets should be managed. This starts with a process it has termed “token mapping”:

Crypto Reform Under Way

In the statement, Treasurer Jim Chalmers highlighted that the review was designed to ensure that Australia kept in line with global best practices:

Australians are experiencing a digital revolution across all sectors of the economy, but regulation is struggling to keep pace and adapt with the crypto asset sector.

Jim Chalmers, Australian federal Treasurer

In doing so, the first item on the agenda was a so-called “token mapping” exercise aimed to establish how different digital assets and related services ought to be regulated. Apparently, this is the first of its kind, making Australia “leaders in this work”.

What Is Token Mapping?

The process of token mapping is said to entail uncovering the characteristics of all digital asset tokens, including the different types, their underlying protocols, and any other relevant technological features.

Chalmers added: “As it stands, the crypto sector is largely unregulated, and we need to do some work to get the balance right so we can embrace new and innovative technologies while safeguarding consumers.”

Noting the increased proliferation of crypto investments to the extent that related promotions are “plastered all over big sporting events”, Chalmers stressed that “we need to make sure customers engaging with crypto are adequately informed and protected”.

Prior to the token mapping exercise, government is expected to release a consultation paper with industry regarding a proposed regulatory framework.

Given the widespread belief among mainstream pundits that most cryptos amount to unregistered securities (including NFTs), the so-called token mapping exercise may yield at least one positive outcome – that it simply isn’t feasible to have different sets of rules for the traditional and crypto sectors (particularly with regards to fundraising and disclosures).

If government does the work, you’d expect it to find that Bitcoin is best reviewed as a commodity, whereas all the other cryptocurrencies are more accurately seen as companies. Most Bitcoiners aren’t, however, holding their breath:

Categories
Australia Crypto News NFTs Sports

AFL NFT Drop ‘Ripper Skipper’ Sells Out in Under 12 Hours

With the 2022 AFL finals season about to blast off on September 1, the Australian Football League’s first limited-edition drop of NFTs has galvanised fans of the indigenous code by selling out in less than 12 hours, raising over $130,000 in USDC:

The Ripper Skipper 2022 NFTs, so-named in reference to the captains (“skippers”) of the AFL’s 18 competing clubs, feature 78 significant highlights from the 2021 season, incorporating both video and audio.

Ripper Skipper NFT of Joel Selwood, captain of Geelong, the AFL’s No 1 team.

Another Drop on August 24

While the initial mint sold out in less than half a day, the wider public will gain access to another drop this Wednesday, August 24. The NFTs are launched to members of the public who have signed up to the allowlist, and will sell for A$49 in lucky dip packs of three cards with differing levels of rarity: common (90 percent), deluxe (8 percent), and ovation (2 percent).

Each pack features three “moments” involving selected club leaders in action. There’s also a 10 percent your pack will receive a special, extra-utility-carrying Genesis Ball NFT (pictured, below) as one of the three cards.

AFL Genesis Ball NFT. Source: afl.com.au

“Through our AFL Mint brand, we will launch exciting new moments across our men’s and women’s competitions, plus celebrate past greats and other product releases that will bring a unique fan experience we haven’t seen before,” said Kylie Rogers, executive general manager of customer and commercial at the AFL.

The AFL announced its NFT marketplace in April this year, revealing it had signed a five-year partnership with Be Media, a Perth-based subsidiary of Hong Kong NFT gaming giant Animoca Brands. At the time there was significant pushback from AFL fans who registered their disapproval at the AFL moving into the NFT space. So much for that …

AFL Mint Will Only Get Bigger in 2023

The marketplace will officially launch in 2023, allowing the selling and trading of moments between fans and collectors. AFL Mint has plans to expand on the concept and offer game-day events, tickets and the chance to meet players in the metaverse.

It appears rumours of a downturn in the NFT space, still negatively affecting the crypto world in general, have been somewhat exaggerated.

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Australia Crypto News Surveys

UN Urges Developing Countries to Curb Crypto Expansion

The United Nations trade body has urged authorities in developing countries to help ensure the prevention of widespread crypto use. The motivation? Vast crypto usage could jeopardise a nation’s monetary sovereignty:

‘Curb your Crypto’

The UN Conference on Trade and Development (UNCTAD) has asked that the governments of developing countries work to prevent widespread crypto adoption. This follows the explosion of crypto use during the Covid-19 pandemic, which also increased the social risks and costs of digital assets in developing nations:

Three related policy briefs were released between June and August detailing the high costs of unregulated crypto, the public payment systems responding to financial stability and security risks, and how crypto can undermine domestic resource mobilisation in developing countries.

While UNCTAD acknowledges that crypto can facilitate remittances, it highlights its role in enabling tax evasion via illicit flows. As a result, UNCTAD has published a set of policy actions and urged authorities to help “curb the expansion of cryptocurrencies in developing countries”.

Global Variations in Crypto Adoption

The adoption rate of crypto across the globe has been varied, to say the least. Some countries have embraced it wholeheartedly while others have slipped behind. Australia is in the latter category. Only 3.4 percent of Australians own crypto, according to new data from UNCTAD, placing the country last in a list of 20. Ukraine and Russia topped the chart with 12.7 percent and 11.9 percent respectively.

However, in 2021 global crypto adoption increased by 880 percent over the previous year. This data derived from a Chainalysis report that named Vietnam as the leader of the crypto adoption ‘race’. It also noted that the keenest adopters tended to be those in developing nations, suggesting higher crypto comprehension in such regions.

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Australia ETFs Investing Regulation

Brisbane-Based ‘Monochrome’ Gets Approval for Spot-Based ETF  

A Brisbane asset management company will offer spot-based crypto exchange traded funds (ETFs), becoming the first to be authorised under an Australian financial services licence (AFSL).

Monochrome Asset Management announced on August 15 that it had gained approval from financial services regulator the Australian Securities and Investments Commission (ASIC) to operate spot-based crypto ETFs under an AFSL. 

The approval opens the door for retail investors to benefit from fully regulated and direct insured exposure to crypto assets, including Bitcoin and Ether. The funds will be headlined by the Monochrome Bitcoin ETF (ticker code: IBTC).

To date, no crypto asset ETFs operate under an AFSL with a crypto-asset authorisation. ASIC’s decision to provide this AFSL authorisation opens new regulated investment opportunities for direct retail investors and through licensed financial advisers.

Monochrome Asset Management

ASIC Approval Offers Regulated Crypto Investing

Monochrome’s spot-based crypto ETFs are not the first launched in Australia – that honour went to ETF products established by Sydney-based Cosmos Asset Management in May, followed closely by 3iQ’s launch of a Bitcoin and Ethereum feeder ETF in June. 

However, Monochrome being the first to operate an ETF under an AFSL – a licence issued by ASIC that’s required to run a financial services business – could be a key differentiator for investors seeking trustworthy advice and investment vehicles.

Monochrome CEO Jeff Yew said that in addition to meeting market demand, its ETF would give crypto investors the protection of a “much higher degree of regulation”.

The regulator’s approval of this licence variation represents a major step forward for both the advice industry and retail investors, allowing advisers to meet the market demands of their clients when it comes to the nascent crypto-asset class. 

Jeff Yew, CEO, Monochrome Asset Management
Categories
Australia Coinbase Crypto News

Sydney Uni Finds Insider Trading Occurs in 10-25% of Crypto Listings

A group of Australian researchers at the University of Technology in Sydney have released a report claiming that between 10 and 25 percent of Coinbase listings since 2018 involve insider trading.

‘Systemic’ Insider Trading

The report alleges that insider trading is “systemic” in the crypto sector, suggesting that up to 25 percent of Coinbase listings in the past four years have involved insider trading, to a lesser or greater extent.

Professor Ester Felez Vinas, Professor Talis Putnins, and PhD candidate Luke Johnson analysed crypto listings between September 2018 and May 2022, and claim that this resulted in some US$1.5 million in profits. Perhaps more telling is the fact that identified cases have yet to be prosecuted.

As a result, the researchers argue that due to the growing perception of insider trading, it may have the result of scaring away potential investors and “impede adoption of cryptographically secured ways of representing securities and other financial instruments”.

In reaching their findings, the team examined 146 Coinbase listings and tracked their prices 300 to 100 hours before each new listing went live on the exchange to look for abnormal trading patterns of said assets on KYC-free decentralised exchanges.

From visual inspection, we note that there is an evident run-up pattern prior to the listing announcement starting at -250 hours.

Report findings

The report adds that “the run-up continues until the listing announcement event, where we see a jump in price because of new information entering the market and traders reacting to the news”. It concludes by saying that the “run-up pattern we observe is consistent with the run-ups in prosecuted cases of insider trading in stock markets”.

Irresistible Temptations

The report comes as little surprise as evidence mounts that insider trading is increasingly becoming a feature within crypto exchanges, particularly those that are less selective with their listings.

We saw it last year in the NFT space, as one senior executive at OpenSea was found to be front-running listings, and more recently a Coinbase employee was charged for doing the same.

Whether in traditional or crypto markets, human nature remains the same. When people have access to asymmetrical information capable of yielding profits, the temptation to take advantage is often too great to resist.

Categories
ASX Australia Blockchain Crypto News

ASX Tokenised Asset Trading Inches Closer to Reality

At last, progress towards tokenised asset trading by the Australian Securities Exchange (ASX) has taken a step forward rather than a step back. A test pilot has been successfully completed with the help of Zerocap, demonstrating how ASX-listed companies could store and trade on the exchange:

It’s Getting Closer

Thanks to Zerocap and its Synfini settlement project, the ASX was able to bridge its custody infrastructure to the platform for trial purposes. Doing so permits the trading and clearing of Ethereum-based tokenised assets.

This recent test pilot is only one part of ASX’s distributed ledger technology (DLT)-based settlement project. Synfini launched in November as a separate initiative from the blockchain-based CHESS (Clearing House Electronic Subregister System) replacement, an upgrade that has been the bane of the project’s existence for some time. The platform allows users access to DLT infrastructure, ledger services and data hosting, while also permitting them to build blockchain applications from it:

According to Zerocap CEO Ryan McCall, final legal approval has been given to launch Synfini asset tokenisation and trading services. He believes there is high interest from organisations who wish to explore tokenisation, along with trade bonds, carbon credits and funds.

https://www.linkedin.com/in/ryanmccall1/overlay/photo/

Thinking beyond Bitcoin, Ethereum and other crypto assets, the tokenisation of bonds, equities, property, carbon credits, private equity, and anything that’s essentially illiquid, there’s a strong value proposition here that we can essentially tokenise any asset and bridge that into the ASX ecosystem.

Ryan McCall, co-founder and CEO, Zerocap

McCall also has faith that Synfini will be a popular tool among a wide range of firms due to the platform’s user-friendly interface and refined variables.

Plagued by Delays

The ASX’s immersion with blockchain has previously been delayed a whopping five times. The most recent of these delays was blamed on issues with blockchain replacement for the clearing system CHESS, and was awaiting an independent review. A spokesperson for ASX stated that “more development is required than previously anticipated to meet ASX’s scalability and resilience requirements for the application”.

The delay to CHESS prior to this was blamed on the firm building the software. At that stage, the project was believed to have already cost ASX A$187 million.

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Australia Bitcoin

Aussie Bitcoiners Gather the Tribe in Proof-of-Work Bush Bash

What started as an ad-hoc post-lockdown gathering of Australian Bitcoiners in Woop Woop, the Bitcoin Bush Bash has inadvertently become a triannual grassroots pilgrimage attracting plebs from across the country, most recently to the coastal town of Yeppoon, Queensland.

Bottoms-Up Event in True Bitcoin Spirit

Back in October 2020, there were growing signs that state borders would be opening soon. This sparked an idea among a couple of Bitcoiners on opposite ends of the country to meet in the middle to catch up and discuss all things Bitcoin over a few cold beers.

One of the organisers put word out to the Bitcoin community, saying:

Hit up @hodloncomrades or @BTCSchellingPt if you wanna come and join us.

@hodloncomrades via Twitter

The plan was to meet at the small, charming country town of Murrurundi in New South Wales, some 320km north of Sydney and over 900km from Brisbane.

Whether intentional or not, the “proof-of-work” required to attend had a self-selecting effect, attracting only impassioned Bitcoiners with conviction from across the country, doubling the amount expected, and substantially more than the average local Bitcoin meetup.

That weekend in Murrurundi, which since has been unofficially declared the Bitcoin capital of Australia, was filled with questions, answers and discussions and demonstrations aplenty – a formula that has since been applied to subsequent iterations of the event.

The Bush Bash is truly an event for and by the plebs. Attendees praise the lack of corporate sponsorship, as well as the opportunity to connect, educate and create long-lasting bonds with like-minded individuals. With support from the Bitcoin Moon Fund and others, it is unlike almost all conferences since it is free, does not require registration to attend, is open-source, and most notably embodies an unspoken egalitarian spirit of humility and sharing of knowledge.

I spent the weekend matching names with Twitter handles, eating steak and left feeling energised and super grateful to be a part of this phenomenal community.

Anon Yeppoon 2022 attendee

Finally, aside from the electric sense of optimism that flows from a Bush Bash, one of the encouraging by-products is the impact on local communities and businesses in each of Bush Bash locations, namely Murrurundi, Beechworth and Yeppoon.

Yeppoon 2022

The most recent Bush Bash took place at the Strand Hotel in Yeppoon, attracting Bitcoiners from far and wide, including one from Perth in Western Australia who travelled an incredible 4,500km. Proof-of-work indeed.

The Strand Hotel played host to Bitcoin Bush Bash 2022 in Yeppoon.

The topics were diverse and varied, from the technical to the philosophical. Among those issues discussed were:

  • The Lightning Network – what Lightning is, the different types of nodes and some key lessons learnt by a node operator along the way;
  • Looking Glass Education – how an Aussie Bitcoiner teamed up with a couple of macro heavyweights to launch the world’s go-to source for Bitcoin and macro education for beginners;
  • Citadels – Bitcoin citadels, their purpose, and strategies employed in their defence;
  • Bitcoin News – the launch of Australia’s first Bitcoin-only news and education website;
  • Bitcoin mining – energy 101, how Bitcoin is the buyer of first and last resort, and what its environment impact is;
  • Bitcoin mining and the grid – energy demand, mining components and home mining operations; and
  • FediMint – an open-source custody protocol enabling groups of individuals to create federated Chaumian Mints on Bitcoin.

In between sessions, there was a tremendous energy among attendees and an overarching sense of shared values and understanding. If Australian Bitcoiners are in search of their tribe, the Bush Bash is most certainly where they would find it.

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Australia Crypto News Investing Regulation

ASIC Chair ‘Troubled’ by Extent of Risk Taken in Crypto Investing

The Australian Securities and Investments Commission (ASIC) has admitted it holds concerns over the crypto investment increase seen during the Covid-19 pandemic, particularly among new, inexperienced investors.

According to ASIC’s new investment behaviour research, conducted among more than 1000 investors in November 2021, crypto was the second most common investment product last year.

Almost Half of Investors Own Crypto

ASIC chairman Joe Longo pointed to the increasing number of new investors buying cryptocurrency without fully understanding the associated risks.

Of those surveyed, 44 percent of investors stated they owned crypto, and of these, 25 percent claimed crypto was their only investment:

https://www.finsia.com/news-hub/the-standard/joe-longo-will-make-access-affordable-financial-advice-one-his-priorities

According to the survey, only 20 percent of cryptocurrency owners considered their investment approach to be ‘risk-taking’, raising concerns that investors did not understand the risks of this asset class.

Joe Longo, ASIC chairman

Perhaps even more concerningly, 41 percent of investors surveyed stated they had received their investing information from social media platforms – predominantly Reddit, TikTok, Facebook, and YouTube.

Longo finds these figures troubling and believes consumers are failing to weigh the risks and fully understand what they are participating in. Andrew Bragg, a NSW Liberal Senator and vocal proponent of the crypto industry, agrees with Longo and recommends “sweeping reforms to regulate crypto”.

ASIC Pleads for Smart Investing

April 2022 was a notable month for ASIC warnings regarding cryptocurrency and other financial matters. Firstly, the regulator released a guidance note for Aussie ‘finfluencers’. The document outlined which financial influencers could be in breach of the law, and recommended these people check they had the right qualifications to be providing financial advice. The move was met with contention by many ‘finfluencers’ at the time.

Only days later, ASIC’s former chairman Greg Medcraft called for urgent Australian crypto regulatory clarity. Medcraft, joined by venture capitalist Mark Carnegie, requested that Aussie regulators join the crypto start-up race. According to the Australian Financial Review, Medcraft hoped to develop a plan to encourage digital asset tech and investment.

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Australia CBDCs Crypto News

Australian Central Bank Goes Public With CBDC Trial

Last year, the Reserve Bank of Australia (RBA) pronounced that it “saw no strong case” for a retail central bank digital currency (CBDC). In a curious about-turn, the RBA has now announced it is “exploring use cases”.

A few alarms bells have been raised, to say the least:

CBDCs in a Nutshell

A CBDC is best understood as a digital form of fiat currency issued and regulated by a central bank (rather than retail banks, as is the case today). They can be classified as either retail or wholesale.

Retail CBDCs are issued directly to people and companies. By contrast, wholesale CBDCs are issued to financial institutions such as banks. The former are said to be useful as a mechanism to deliver “helicopter money” or universal basic income, whereas the latter are suitable for interbank transfers.

Risks and Benefits

Over 100 governments are at some stage of experimenting or implementing CBDCs, and cite their numerous benefits to include:

  • technological efficiency – money transfers and payments can be made in real time, directly from the payer to the payee;
  • reduced risk for merchants as settlement is instant;
  • financial inclusion – in that any legal resident or citizen can be provided with a free or low-cost basic bank account;
  • preventing illicit activity by tracking each unit of CBDC since all transactions are traceable;
  • improved tax collection – taxes can simply be deducted at source;
  • combating crime – the blockchain is transparent, making it easy to track criminal activities; and
  • improved safety – as carrying physical cash constitutes a risk.

However, enormous privacy and surveillance concerns have been raised from the outset, with critics describing CBDCs as “programmable money” capable of being switched on and off at the whim of centralised authorities. It is considered to be the seed of a social credit score, as once you are able to control the money, you become capable of controlling the citizenry through behavioural economics, as is the case in China:

What Is the RBA Up To?

According to the announcement, the research project is a collaboration between the RBA and the Digital Finance Cooperative Research Centre (DFCRC) to focus on the uses for, and potential economic benefits of, a CBDC:

The project, which is expected to take about a year to complete, will involve the development of a limited-scale CBDC pilot that will operate in a ring-fenced environment for a period of time and is intended to involve a pilot CBDC that is a real claim on the Reserve Bank.

RBA announcement

The announcement adds: “Interested industry participants will be invited to develop specific use cases that demonstrate how a CBDC could be used to provide innovative and value-added payment and settlement services to households and businesses.”

RBA deputy governor Michelle Bullock described the project as “an important step” on the path to a potential Australian CBDC, saying on ABC Radio’s The World Today program it was effectively “an experiment”.

CBDC is no longer a question of technological feasibility. The key research questions now are what economic benefits a CBDC could enable, and how it could be designed to maximise those benefits.

Andreas Furche, chief executive, DFCRC

The RBA indicated that part of the motivation for the experiment was that it didn’t want to be left behind. A report is expected in around a year’s time and according to Bullock, an Australian CBDC is not necessarily a certainty.

RBA ‘Jawboning’ on Stablecoins v CBDCs

This all comes as just three weeks ago, RBA chief Philip Lowe indicated that private stablecoins were “probably better than CBDCs“. Then again, the RBA also forecast inflation to be 1.5 percent this year, which has since risen to 6.1 percent, a 21-year high. Macro policy commentators would describe this as “jawboning”, and would suggest watching what the RBA does, and not what it says.

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Australia Bitcoin Mining Crypto News

Australian Green Bitcoin Miner ‘Iris Energy’ Doubles its Hash Rate

Australian green Bitcoin miner Iris Energy has successfully doubled its hash rate on completion of phase two of its Mackenzie site and expects to add further capacity to its Prince George site, also in Canada, by the end of September:

Way Ahead of Schedule

More than a month ahead of schedule, Iris Energy switched on 41 megawatts of Bitcoin mining machines in British Columbia on August 5. The move has lifted the Bitcoin network’s exahashes/second (EH/s) rate to 2.3 EH/s.

https://irisenergy.co/leadership-team/

We are particularly pleased to continue our track record of delivering projects on schedule, despite the current market backdrop and ongoing international supply chain challenges.

Daniel Roberts, co-founder and co-CEO, Iris Energy

Iris Energy has a second site in British Columbia, Prince George, to which it intends to add another 1.4 EH/s (needing 50 MW of energy capacity). As a result of the prompt hash rate increase, the company’s Nasdaq-listed shares were up by more than 10 percent on August 8.

Previous Positives

In March 2021, Iris Energy smashed its pre-IPO funding target of A$20 million. Thanks to an unexpected Platinum Asset Management (PAM) financial commitment, the target was doubled to A$40 million. PAM had pledged $13 million in capital ahead of the planned IPO.