Category: Australia

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Australia Crypto News Cryptocurrencies Surveys

Adoption Rate Grows as +28% of Australians Now Own Crypto, Latest Report Shows

Almost three in 10 Australians now own (or have owned) crypto, according to the 2021 Independent Reserve Cryptocurrency Index (IRCI), released this week.

Conducted nationally, the third annual IRCI survey revealed the following key points:

  • Exactly 28.8 percent of Australians now own or have owned crypto (up from 18.4 percent in 2020).
  • The proportion of women who own crypto has almost doubled from 10.1 percent in 2020 to 20 percent.
  • Up from 78 percent in 2020, 89 percent of Aussie crypto owners report having made money or broken even.
  • Bitcoin remains the most popular cryptocurrency with 89.1 percent of Australians aware of it and 21.1 percent owning it.

2021 a ‘Bumper Year’ for the Australian Crypto Industry

By its own reckoning, the IRCI survey provides a benchmark for the awareness, trust and confidence everyday Australians place in digital currencies. In the words of Independent Reserve CEO Adrian Przelozny, “This has been a bumper year for the crypto industry, with new products like ETFs hitting the market and providing more alternative investment opportunities for Australians, but the sector still desperately needs regulation to catch up and provide greater security for both investors and cryptocurrency businesses”.

“Our IRCI results this year support this, with 28.6 percent of Australians who don’t currently own crypto telling us they would invest if there were better consumer protections in place. Another 26.6 percent said they’d buy crypto if industry regulation was improved.

Although Australian regulators and government agencies may have taken a while to get their heads around cryptocurrencies and other digital assets, Australians themselves have sped ahead and we’re really seeing that in past year, as an asset class, crypto has gone from the fringe to the mainstream.

Adrian Przelozny, CEO, Independent Reserve

Bitcoin Still King Down Under

Unsurprisingly, the IRCI survey found that Bitcoin remains the best-known and most popular cryptocurrency, with almost nine in 10 Australians saying they’ve heard of it and more than one in five owning it. The next ranked crypto is Ethereum, at 11 percent (up from 5 percent ownership in 2020).

Another poll conducted by Coinspot earlier in 2021 contained a bold prediction from some Australians that bitcoin would pass the A$100,000 mark by the end of this year.

Millennials and Gen Z Lead the Crypto Charge

Unsurprisingly, the 24-34-year-old age group was the most trusting of crypto, with 27.6 percent saying they bought in expressly to get rich. Doubters were most likely to be found in the 65+ age group.

Comparison site Finder reported in its September survey that Australians had amassed over A$7 billion in crypto with 31 percent of the Gen Z population leading the investment charge, a figure that had effectively doubled since January 2021.

If you’re looking to open an account with Independent Reserve, who also announced a sponsorship deal with the Sydney Swans AFL team this week, you can follow some simple steps here and could be buying crypto within minutes.

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Australia CBDCs Crypto Exchange Payments Regulation

Treasury Moves to Consider Feasibility of CBDC and Crypto Legalisation Reforms

The Australian government is making strides in reforming consumer and business payments as well as building a framework for the regulation of the crypto market as innovations in payment technology rapidly increase.

The Rise of New Payment Technology

Australia has long been working on the possible implementation of a Central Bank Digital Currency (CBDC), and a year-long study by the Reserve Bank of Australia (RBA) has determined that a CBDC could be used by the wholesale market for the funding, settlement and repayment of a tokenised syndicated loan on Ethereum-based distributed ledger technology (DLT). Research will continue accordingly.

The report comes as the Australian government is in the process of overhauling its regulatory framework for payment systems for the first time in more than 20 years. The concern with emerging payment technologies – such as those provided by Ant Group Co or even Tether – is that a digital currency pegged to the US dollar could pose a threat to monetary regimes and add a new layer to cross-border payments.

If we do not reform the current framework, it will be Silicon Valley that determines the future of our payments system […] These are significant shifts which we need to be in front of.

Josh Frydenberg, Australian Federal Treasurer

According to the Australian Taxation Office, more than 800,000 Australians have made transactions with digital assets since 2018. Since the technology is available and people are using it, the country has also opted to broaden its payment laws to cover online transaction providers such as Apple Inc and Alphabet Inc’s Google, as well as buy-now-pay-later (BNPL) providers like Afterpay Ltd. This would effectively end their run of operating without direct supervision.

Australia Leading Crypto Regulation

Leading up to the reform, in October an Australian Senate committee released a 12-point crypto reform plan to assist in the regulation of the growing digital asset ecosystem. Now full-scale crypto regulation is coming to Australia, and it includes licences for exchanges, laws for DAOs, action on de-banking and a review of tax settings.

The move to regulate digital assets is an important one with many factors to consider, but consultation and discussion are essential first steps with the support of key individuals in government positions.

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Australia Crypto Exchange Crypto News Crypto Wallets

Australian Exchange MyCryptoWallet Goes into Liquidation

MyCryptoWallet, an Australian exchange claiming to be the first to offer zero fees trading, has collapsed and gone into liquidation. This has left some users with a sinking feeling after being have been unable to access their accounts to withdraw their investments.

Not the First Issue?

Earlier this year, Crypto New Australia reported that alarm bells had been raised when the Australian Securities and Investments Commission (ASIC) had been called in to investigate complaints from several MyCryptoWallet users claiming they were unable to access their crypto assets. But this wasn’t even the first complaint.

According to the Sydney Morning Herald, the Melbourne-based exchange is said to have signed up over 20,000 users in its first three months of operation, after launching in late 2017. However trouble arose in 2019 following a dispute with NAB which resulted in the company’s accounts being frozen.

Later that year, the company once again ran into difficulties, this time with its technology partners, leaving users unable to withdraw funds from the exchange. Thereafter, the complaints continued with some users being unable to access their accounts, others unable to trade using 2FA systems or some, not being able to load the company’s website at all.

Jaryd Koenigsmann, former CEO MyCryptoWallet. Source: MyCryptoWallet

A Bitter Ending for MyCrypto Wallet – Liquidation

This past Friday, December 3, the company’s 28-year-old chief executive Jaryd Koenigsmann called in administrators, according to documents lodged with the corporate regulator.

Shortly after, Terry van der Velde of SV Partners was appointed as liquidator of the company. While it is too early to establish how many creditors there were and how much is owed, a report is expected to be filed December 17.

To help creditors recover at least a portion of their investments, Mr Van der Velde is now on the hunt to find a buyer for MyCryptoWallet’s technology infrastructure.

SV Partners will be formally releasing an Expressions of Interest Memorandum by approximately 10 December for an opportunity to purchase the technological infrastructure of the business.

Terry van der Velde, SV Partners

Much like in the past, the exchange’s collapse has left an unknown number of aggrieved customers unable to access their funds. The writing appears to have been on the wall for some time as as users have been unable to get in touch with anyone from MyCryptoWallet.

Mr Koenigsmann too appears to have foreshadowed what was coming, having reportedly listed his Melbourne home for sale in July with an asking price of A$1.3m.

The story of MyCryptoWallet, although unfortunate, is a cautionary one. It provides a timely reminder that investors must conduct a due diligence into the credibility and track record of a crypto exchange, or any crypto company for that matter. Bad customer service and blocking withdrawals are just two of the red flags users should be looking out for.

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Australia Crime Crypto News

Liquidators Fight to Recover $21 Million in Crypto from Melbourne Firm’s ‘Stolen Laptop’

Melbourne-based multinational bitcoin mining firm Blockchain Global Limited collapsed in October, owing more than A$20 million to investors. Now those investors are seeking millions of dollars’ worth of bitcoin in a stolen laptop. 

Blockchain Global operated a crypto trading firm, ACX, which was drawn into a legal battle facing at least 94 investors after it stopped working in February 2020. A Victoria Supreme Court judge granted the firm’s administrators more time to recover the millions lost due to the complexity of recovering lost crypto.

Investors were complaining about being unable to access their funds at first. Withdrawals were suddenly blocked and customer support stopped providing any assistance.

Andrew Yeo, from accounting and advisory firm Pitcher Partners, said Blockchain Global’s assets included millions in bitcoin and ethereum. But contacting Blockchain Global’s directors – Allan Guo and Sam Lee – proved problematic as they reside overseas. Lee was not responsive when contacted via email or Chinese messaging service WeChat, the court was told.

Yeo said Guo had confirmed he could access the funds, but that the credentials he needed to access it were on a stolen laptop.

Investors Fighting to Recover More Than $21 Million

Investors are now fighting to recover more than A$21 million sitting on the missing laptop. This has raised concerns among investors, who now suspect fraud on the part of the former directors.

One investor, Bruno Fabre, told The Sunday Age newspaper that he had no concerns or issues with Blockchain Global and ACX until withdrawals were suddenly blocked.

I had no suspicion that it was a scam or anything like that. I was buying and selling, everything was functioning the way I thought it should function. It’s become obvious since then that there’s been some sort of wrongdoing.

Bruno Fabre, investor

Some investors claim that Blockchain and ACX owe them hundreds of thousands of dollars. When the case was taken to legal action, the Supreme Court granted a freezing order over an additional 117 BTC -roughly A$9 million.

This case is similar to the A$100 million class action lawsuit against the issuers of Qoin, a token promoted by the Queensland-based backers of 30-year old trading exchange Bartercard.

Misleading statements and failing to comply with consumer guarantees are not unusual in shady Australian-based crypto projects. A month ago, Crypto News Australia reported the shutdown of unlicensed Gold Coast financial services business A One Multi for suspected unlawful activity.

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Australia Bitcoin Crypto News ETFs Ethereum

Australia’s First Spot Crypto ETFs Launching Through ‘ETF Securities’ and ’21Shares’

ETF Securities will partner with 21Shares to provide Australian investors with access to the country’s first direct Bitcoin and Ethereum exchange-traded funds (ETFs), along with a best-in-class blockchain education and research centre.

Australia Gets its First Direct BTC and ETH ETFs

Subject to regulatory approvals, the ETFS 21Shares Bitcoin ETF (EBTC) and ETFS 21Shares Ethereum ETH will provide Australians with a way to invest in Bitcoin and Ethereum, via funds operated by the new partnership between ETF Securities and 21Shares. Zurich-based 21Shares, backed by Cathie Wood, has currently almost US$3 billion in assets under management in its 20 European crypto exchange-traded products (ETPs) available across eight exchanges. 21Shares has managed Bitcoin and Ethereum ETPs for three years and was additionally responsible for creating the world’s first physically-backed crypto ETP in 2018.

Graham Tuckwell, executive chairman of ETF Securities Australia, had this to say:

Once we had decided to build a range of crypto ETFs for the Australian market, there was only one partner we wanted to work with and that’s 21Shares. They are [at] the cutting edge of crypto ETPs in the world today.

Graham Tuckwell, executive chairman, ETF Securities Australia

Along with the ETFs, the partnership will also offer a research and education centre to be built on 21Shares’ investment-grade and cutting-edge research – some of the world’s most comprehensive. The research covers a vast array of different blockchains and cryptos, not only Ether and Bitcoin but also lesser-known, fast-growing cryptos such as Avalanche, Solana and Polygon.

The centre aims to explain in simple English how the often-complicated crypto and blockchain-verse works, and will also feature the latest crypto news, various blockchain metrics, price action and important news on miners, custodians and other companies involved in the supply chain.

Hany Rashwan, chief executive of 21Shares, expressed that the company was excited to take on the partnership to launch cryptos ETFs for Australian investors: “This partnership is an opportunity to combine our expertise to provide the simplest and most transparent way to access the best performing asset class of the last 10 years.”

Australian ETFs Undergo Explosive Growth

The announcement of the partnership between ETF Securities and 21Shares comes as welcome news amid Bitcoin ETF applications growing out of control. There are 34 Bitcoin ETF applications currently pending approval, with the number rising every day.

The ETF joins BetaShares ETF in offering crypto investment to the Australian market. BetaShares, an Australian crypto ETF, launched in early November and surpassed all expectations as A$5.2 million was traded in only five minutes, smashing Australian Securities Exchange trading records.

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Australia Blockchain Crypto News Industries Regulation

ASX’s Long-Awaited Blockchain CHESS Replacement Goes Into Testing

ASX Prices Climb as Bitcoin Price Plummets On Anzac Weekend
A board displaying stock prices is seen at the Australian Securities Exchange (ASX) in Sydney, Australia, February 9, 2018. REUTERS/David Gray

Yesterday, the Australian Securities Exchange (ASX) announced the opening of the first of the Industry Test Environments (ITE1) for its blockchain post-trade replacement solution, CHESS.

The upgraded CHESS system has undergone some rigorous tests to ensure it can deal with Australia’s increasingly large share market. This is a major step towards the new CHESS equities clearing and settlement system going live in 2023.

The Clearing House Electronic Subregister System (CHESS) is the core system that performs the processes of clearing, settlement, asset regulation, and other post-trade services that are critical to the orderly functioning of the market. ITE1 gives CHESS users their first exposure to ASX’s fully integrated external solution, which includes Digital Asset’s DAML smart contract development capability and VMware’s DLT platform. The solution uses Digital Asset’s DAML smart contract language and VMWare’s blockchain.

The New System Available in 2022

ITE1 will open for software providers, third-party vendors who supply software to CHESS users, and organisations developing in-house systems. The ITE2 will open in April 2022 for market participants and other CHESS users. The announcement is for developers, while end-users will be able to access another iteration (ITE2) of the test environment from the same date, while the launch date is planned for April 2023.

This is truly a step in the right direction as the project has already been delayed three times. In September 2018 ASX pushed the live date to late 2020, but it was extended to April 2022. The extension was given to allow participants and regulators to cope with the volatility of early pandemic trading, and then to allow the new system to be redesigned to accommodate a massive increase in trading volumes.

Tim Hogben, the ASX group executive for securities and payments, said in a media statement:

Today’s opening is a significant step on the journey towards the go-live for the CHESS replacement system in April 2023. Together, we’ve entered a new and exciting phase of the project.

Tim Hogben, ASX

He added that the system would generate valuable feedback for ASX on the state of the new and developing system, with software providers testing functional and non-functional workflows across all connectivity access channels.

A Keen Eye Will Be Kept on CHESS

Hogben described the CHESS replacement project as a key pillar in ASX’s strategy to “build an exchange for the future and deliver world-leading infrastructure to the Australian market”.

Given that the CHESS replacement project involves groundbreaking technology, it is sure to garner a lot of attention. As a result of the hype around CHESS, ITE1 will be closely watched by many financial markets worldwide as the world considers its own long-term technology solution upgrade.

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Australia Banking Crime Crypto News Regulation

CBA’s Crypto Team to Help Track Down Money Launderers

Despite ongoing sentiment in traditional finance circles that crypto is the “Wild West”, Chainalysis, which recently partnered with Commonwealth Bank of Australia (CBA), has assured Australia’s biggest bank that it truly isn’t so.

The Crypto Wild West. Source: Zen Monk

Crypto Forensics On the Case

Chainalysis, which works extensively with the FBI and IRS in the US, has proprietary on-chain forensic analysis techniques that help identify criminal and money-laundering activities on public blockchains.

Speaking to ongoing discussions with local Australian authorities, Chainalysis’ Australia and New Zealand manager Todd Lenfield noted that a lot of its work centred on education.

We want to have conversations with AUSTRAC about what are they looking to regulate and explain to the tax office the lessons that can be learned from what the IRS is doing. We can take experience we have got in the space, and provide a local flavour.

Todd Lenfield, Chainalysis’ country manager in Australia and NZ

Shift in Sentiment in Australia?

In recent months, there have been positive signs that Australia may be gradually shifting towards a more crypto-friendly environment.

Earlier this month, CBA became the first Australian bank to offer its customers the ability to buy cryptocurrencies natively through its digital app. And just this week at the Australian Financial Review Super & Wealth Summit, Liberal Senator Jane Hume cautioned industry against being left behind.

Don’t be the person who thought the iPhone would never take off because people would prefer to have their music and telephone on separate devices. Don’t be the person who was still doing their financial models by hand in 2001, rather than using Excel. Don’t be the person in 1995 who said the internet was just a place for geeks and criminals and would never become mainstream. And don’t be the person who argued that email was a passing fad.

Senator Jane Hume

Despite these positive signs, the Reserve Bank of Australia (RBA) remains concerned about the risks of crypto, in particular memecoins. Over the past year, crypto has seemingly crossed the chasm into mainstream consciousness. This in turn appears to have pushed regulators towards embracing innovation and regulating it, rather than trying to undermine or shut it down.

While some regulatory risks remain, the crypto space within Australia is arguably looking brighter than ever.

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Australia Bitcoin Crypto News Regulation Superannuation

ASIC Investigating Further into Gold Coast Superannuation Scam

Short of opening a special branch in Queensland, the Australian Securities and Investments Commission (ASIC) has had an unusually busy month in the Sunshine State.

On November 6, ASIC obtained Federal Court orders to shut down unlicensed Gold Coast financial services business A One Multi for suspected unlawful activity. This came after it imposed a three-year ban on Queensland investment adviser Keith Robert McDermott for similarly failing to provide advice in clients’ best interests.

In the same week, an A$100 million class-action lawsuit was filed against the Gold Coast-based issuers of controversial token Qoin.

Now ASIC is trying to recover a trove of bitcoin worth up to A$29 million held in an encrypted device belonging to a director of A One Multi who is suspected of large-scale superannuation fraud. The investigation implicates CoinSpot, the crypto exchange used by accused scammer Aryn Hala to invest his allegedly ill-gotten gains.

Almost $30 Million in Bitcoin Unaccounted For

ASIC has co-accused Hala and his partner Heidi Walters along with A One Multi of scamming 92 financially strapped Australians who were looking to gain early access to their super. Bank accounts show the couple’s company received A$25 million from the investors. No criminal charges have been laid.

Alleged super scammer Aryn Hala. Source: Gold Coast Bulletin

ASIC alleges Hala and Walters used their victims’ money to buy bitcoin, luxury cars and other high-end goods, couture fashion, weight loss surgery, and to make a substantial donation to their church.

The couple has engaged lawyers, indicating they intend to challenge ASIC’s allegations. Hala and Walters’ legal team says they are openly assisting both ASIC and the receivers with their inquiries, including providing all financial records, in the hope the investigation is expedited.

ASIC called in receivers from KPMG to unravel Hala’s business and personal accounts and to trace the trove of bitcoin. It has also won travel bans against Hala and Walters and freezing orders over their assets, which include a Tesla and a Ferrari.

Unpicking Hala’s bitcoin investments has proved problematic for regulators and has raised issues regarding oversight controls at CoinSpot, which bills itself as one of Australia’s leading cryptocurrency exchanges.

CoinSpot Initially Claimed Hala Was Not a Customer

According to court documents filed by the regulator in support of freezing orders against the couple and A One Multi, CoinSpot initially told ASIC investigators that no records were held for crypto accounts in the name of Hala, Walters, or their company.

On closer inspection of Hala’s bank statements, ASIC located his CoinSpot account number and found he had a balance of just $1.96. A full CoinSpot audit showed Hala’s bitcoin wallet had received 375.99 BTC (worth almost A$30 million at time of writing) and executed total sell orders of A$979,843 – indicating that some $29 million worth of coins were located elsewhere. ASIC investigators believe Hala had transferred the coins to a cold wallet.

CoinSpot defended its early claim that Hala was not an account holder.

CoinSpot has a cooperative relationship with all relevant regulatory bodies including ASIC. Any lawful requests for information by regulators are treated seriously and with priority … [although that] information may need to be verified before any information can be shared.

CoinSpot statement

Hala is expected to share instructions with receivers KPMG on how to access his cold wallet in coming weeks.

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Australia Blockchain Crypto News DeFi

Australian Senator Says ‘Crypto is Here to Stay’

Many in the Aussie crypto world may not have heard much about Liberal Senator Jane Hume, the Minister for Superannuation, Financial Services and the Digital Economy. That is until she voiced her views on crypto at the Australian Financial Review Super & Wealth Summit held in Sydney this past Monday.

Australia, Crypto is ‘Here to Stay’

Hume, who also serves as Minister for Women’s Economic Security, spoke of embracing innovation and “encouraging personal responsibility and informed consent”. This she saw as important as driving Australia forward from an innovation and economic perspective.

Referring to the Senate Committee’s report, she noted that 17 percent of Australians are investing in cryptocurrency.

This is an asset class that has captured hearts and minds, but beyond that ‑ whatever you might personally think ‑ it’s a technology that’s not going away any time soon.

Senator Jane Hume

One of the key areas she identified as having “huge opportunities” was decentralised finance (DeFi). After commending industry for embracing blockchain specifically, she stressed the role of government in encouraging innovation. Hume also added “as an industry, and as a government, we need to acknowledge this is not a fad. We should tread cautiously, but not fearfully”.

The Senator’s Personal View

Speaking to her personal views, Hume cautioned against being left behind the curve.

Don’t be the person who thought the iPhone would never take off because people would prefer to have their music and telephone on separate devices. Don’t be the person who was still doing their financial models by hand in 2001, rather than using Excel. Don’t be the person in 1995 who said the internet was just a place for geeks and criminals and would never become mainstream. And don’t be the person who argued that email was a passing fad.

Senator Jane Hume

Hume commented that if the past two to three decades had proved anything, it was that “innovation begins as disruption and ends as a household name”.

Overall, the response from the crypto community has been very positive:

Blockchain Australia CEO Steve Vallas shared the industry’s sentiments when he commented that the speech sent a “very strong signal” to both the market and policymakers, that treasury was taking the industry seriously.

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Australia Banking Crypto News Gemini

CBA Makes Investment in Winklevoss Twins’ Gemini in $400 Million Fund Raise

The Winklevoss twins have several claims to fame, the least of which is founding one of the more successful exchanges in the world, Gemini. This week, the company announced a US$400 million fund raise to further grow the business, with a rather surprising investor participating in the investment – Australia’s largest bank, the Commonwealth Bank of Australia (CBA).

Gemini Valued at $7 Billion

After self-funding the business for the past seven years, the Winklevoss twins have raised Gemini’s first round of capital, bringing the company’s valuation to US$7.1 billion. After enjoying success in Singapore, the company announced earlier this year it would be expanding into Australia.

While the twins retain 75 percent ownership in the company, it is estimated that their net worth would almost double from US$6 billion to US$10 billion as a result of the deal. The investment round was led by digital asset giant Morgan Creek Digital, to the tune of U$75 million, and included several others including Jay-Z’s Marcy Venture Partners and CBA.

It is believed that part of the investment would be to expand the company’s reach into the metaverse, a theme the brothers picked up in early 2021, ahead of arch-rival Mark Zuckerberg. Zuckerberg’s Facebook recently rebranded to Meta as part of the company’s move into the space, but it has been met with much derision.

There’s these two parallel paths, in terms of technology right now …There’s a centralised path, like Facebook or Fortnite, that is one step away from being a metaverse, and that’s totally fine. But there is another path, which is the decentralised metaverse and that’s the metaverse where we believe there’s greater choice, independence and opportunity, and there is technology that protects the rights and dignity of individuals.

Cameron Winklevoss, co-founder, Gemini

CBA’s Surprise Investment

CBA’s investment into Gemini is surprising in one sense, but entirely predictable on the other. On the one hand, you have a situation where traditional banks, including CBA, have been debanking crypto businesses in Australia, allegedly on the basis of operational and/or compliance risk. Cynically, you could argue that compliance was used as a guise to stifle competition and prevent the outflow of funds onto exchanges.

However, on the other hand, you see CBA taking the lead by its recent announcement that clients could buy crypto directly through its app, incidentally through a partnership with Gemini.

As traditional banks start to feel the squeeze of customers’ funds pouring onto crypto exchanges, it isn’t surprising that they would like to retain control of the funds on their own platform – or, failing which, investment in platforms benefiting from such outflows.

In this case, if you can’t beat them, invest in them.