This Month in Crypto: Australian Senate Rejects 2023 Digital Assets Bill

Australian Senate Rejects 2023 Digital Assets Bill, Advocates for Further Industry Consultation

The Australian Senate Economics Legislation Committee has rejected the “Digital Assets (Market Regulation) Bill 2023” introduced by opposition senator Andrew Bragg. Instead, the committee recommends further industry consultation for the development of suitable digital asset regulation in Australia. Bragg, representing New South Wales, criticised the decision, claiming that the Labor government has slowed down crypto regulation. The committee cited the bill’s lack of detail, inconsistency with the government’s approach, and concerns about international compatibility, potentially leading to regulatory arbitrage and negative industry outcomes.

Senators Bragg and Dean Smith expressed support for the bill in a dissenting report, proposing minor amendments like excluding nonfungible tokens (NFTs) from the definition of regulated digital assets. They also suggested excluding specific asset-based tokens and extending the transition period from three to nine months. Additionally, they called for a review of the tax treatment of digital assets and transactions, with plans to introduce legislation in early 2024. The bill, introduced in March, aims to safeguard consumers and promote investor interests by providing regulatory recommendations for stablecoins, exchange licensing, and custody requirements in Australia.

Decentralised Network ‘Mixin’ Loses AUD $310M in Devastating Hack, Investigations Underway

Mixin Network, a decentralised peer-to-peer network, suffered a major hack resulting in the loss of around AUD $310 million in crypto assets. The breach, which occurred on September 23, involved a compromise of a third-party cloud service provider’s database. Mixin Network has suspended all deposits and withdrawals while it investigates and addresses the vulnerabilities.

Mixin Network has offered a bug bounty equivalent to AUD $31 million to the hacker responsible for the exploit, with a plea to return the stolen funds, emphasising that most of the assets belonged to users. Founder Feng Xiaodong stated that the company would reimburse affected users up to a maximum of 50%, with the remainder in bond tokens repurchased with the business’s earnings. The exploit highlights the vulnerability of cross-chain protocols in the decentralised finance space, with over $2.5 billion in losses reported from DeFi exploits.

U.S. House Representatives Urgently Call on SEC’s Gensler for Immediate Approval of Spot Bitcoin ETF

Four members of the House Financial Services Committee, including Rep. Tom Emmer, have urged SEC Chair Gary Gensler to expedite the approval of Bitcoin exchange-traded funds (ETFs) in a bipartisan letter. They argue that a spot Bitcoin ETF is similar to crypto futures ETFs already approved by the SEC. The letter comes after a court ruled against the SEC’s rejection of Grayscale’s spot Bitcoin ETF application, deeming it “arbitrary and capricious.”

In a related development, the SEC has postponed its decision on several proposals for spot Bitcoin ETFs, including BlackRock and Invesco, ahead of a potential government shutdown. The applications of Invesco, Bitwise, and Valkyrie have all faced delays, with further postponements expected for Fidelity, VanEck, and WisdomTree. The timing of these delays is attributed to the anticipated U.S. government shutdown, potentially impacting the functioning of financial regulators and federal agencies.

Previously a Bloomberg ETF analyst Eric Balchunas raised the probability of a spot Bitcoin ETF approval to 95% by the end of 2024, citing the decisive court ruling in favour of Grayscale over the SEC. The final decision for the current batch of applicants is expected by mid-January, potentially subject to further delays.

More news stories circulating the block:

• ANZ advances towards AUD stablecoin implementation following successful Chainlink test transaction
• House Committee passes Bill prohibiting FED from developing a CBDC
• Bitcoin attains formal recognition as Digital Currency in Shanghai, China
• MoneyGram aims to facilitate crypto-to-fiat conversions with new non-custodial wallets
• Ether faces inflationary phase amidst 9-month low in network activity
• U.S. company, MicroStrategy continues to accumulate Bitcoin, now holding 158k BTC which is approximately 0.75% of the total 21m supply.
• Potential launch of Ethereum futures ETFs looms next month, predicts Bloomberg analyst
• Venture capitalist firm, Blockchain Capital secures $580M in funds for Crypto Gaming and DeFi investments
• Pudgy Penguins, a popular NFT collection unveils a toy line available at Walmart, offering access to an immersive digital experience

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