Blockchain APAC Managing Director and Technical Advisor for Skafold Global, Steve Vallas, said token mapping has the potential to shape the regulatory perimeter by helping to legally define digital assets and whether they are products. financial.
“As an example, the token mapping exercise could provide insights to exchanges and industry stakeholders on the factors and characteristics that create or exclude obligations applicable to financial products,” Vallas said.
“In effect, it facilitates a new opportunity to determine whether the legal classification is appropriate given the type of product, its risk and how it is likely to develop or be reconstituted.”
Global leader, Digital Transformation Practice, Norton Rose Fulbright, Nick Abrahams agrees with the government’s current priorities, saying there is too much unregulated trading in Australia.
“Many of them are on the lower scale. These exchanges pose a significant risk to Australians, especially those who store their crypto on the exchange. If the exchange is compromised by fraud, hacking or lack of of cash, many ordinary Australians will lose their money.
Abrahams said token mapping would help distinguish crypto investments from the more innocuous use of digital tokens, such as for big brand marketing and loyalty programs.
“We need to move quickly to a situation where it is clear which tokens are unregulated and which are regulated. Not all tokens need to be regulated.
Global authority on digital asset regulation and consultant to McDonell Nadeau, Loretta Joseph, said that in addition to “proper custody rules”, the turmoil created by FTX’s collapse has highlighted the urgent need for basic compliance clarity for the crypto industry.
“The last few days have shown that things like reporting, governance, cash management – whether it’s a crypto asset or a security or fixed income assets – those things need to have the appropriate checks and balances put in place by these companies.”
Joseph recently took part in a discussion on global standards for virtual assets at the 17th G20 in Bali: she said progress was being made on global alignment and Australia did not need to reinvent the wheel .
“We are dealing with an industry that is global in nature. I think all jurisdictions should take note of global standard setters and work from those frameworks,” Joseph said.
She said consensus on definitions among regulators globally was also important to avoid what she describes as “jurisdictional arbitrage”.
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