In its statement, ASIC stated that it considers many crypto assets as financial products and stated that this situation could create an additional regulatory burden on crypto companies. According to experts, this new situation may increase companies’ thoughts of moving abroad.

Kirkland told a crypto summit hosted by the Australian Financial Review that “a large number of widely traded crypto assets are financial products.” This interpretation means that many crypto assets will need a license under current laws.

This has raised concerns that ASIC is tightening its oversight. Some experts stated that this strict control could direct companies abroad.

Amy-Rose Goodey, executive director of the Australian Digital Economy Council, said ASIC was taking a stricter approach and businesses were feeling uncertain. This uncertainty may cause companies to seek opportunities abroad.

Additionally, Michael Bacina, a partner at law firm Piper Alderman, noted that ASIC’s “coercive regulatory approach” could be detrimental to the development of the industry. Bacina noted that this type of approach is a path taken by the US’s SEC years ago.

During Kirkland’s statements, Finder Wallet founder Fred Schebesta, who was on stage at the time, described Kirkland’s approach as “fining the Wright Brothers without a pilot’s license.”

This irony showed attendees how complex regulatory uncertainties are. Schebesta emphasized that the laws need to be updated and that ongoing maintenance and compliance after licensing can be quite burdensome.

Kate Cooper, Zodia Custody’s Australian CEO, stated that many crypto companies find the current situation in Australia unsustainable and that they want to move towards jurisdictions with clearer regulations, such as Dubai and Singapore.

ASIC’s approach creates uncertainty about crypto regulation in the country. The draft laws announced in 2023 have not yet come into force, further increasing uncertainty in the sector.

“There are still many gray areas regarding crypto regulation, and further delays in the introduction of new regulation are expected, which could jeopardize the stability of the industry,” Cooper added.

Andrew Charlton, an MP representing the government at the event, was unable to say for sure whether the bill would appear before the next federal election. Elections are expected to be held next year, but an exact date has not yet been determined.

Australia’s crypto industry faces uncertainties that could be created by ASIC’s strict oversight and regulation. Crypto companies face the risk of heading abroad due to these uncertainties, which could affect the future of the country’s crypto market.

Experts believe that quickly establishing a clear regulatory framework will move the industry forward in a healthier way.