Lack of Regulation Limits Australian Crypto Market to Token Sales Only

Regulation through enforcement often leads to suboptimal outcomes for all stakeholders, including consumers, as it creates a negative stigma around industry companies, according to the co-founder of an Australian crypto startup. The co-founder expressed optimism that the Australian Securities and Investments Commission's recent court setback would encourage Parliament to establish a regulatory framework for the Aussie crypto industry.

Regulators must differentiate between bad actors and those acting in good faith when carrying out their mandate, according to Charlie Karaboga, co-founder of the Australian crypto startup Block Earner. Karaboga emphasized that while regulators are obligated to protect consumers and investors, they must differentiate between malicious actors and good-faith innovators when carrying out their mandate.

These remarks by Karaboga were made just days after an Australian Federal judge ruled against imposing a financial service law penalty on Block Earner. The crypto startup, having acted "honestly and not carelessly," should not be penalized with the AUD 350,000 fine sought by the Australian Securities and Investments Commission (ASIC), according to Judge Ian Jackman. Furthermore, the court criticized ASIC for issuing a press release with a misleading headline. Court documents revealed that the release suggested Block Earner was still breaching financial service laws, leading several media outlets to report inaccurately on the February 9 judgment. Block Earner claimed that the erroneous press statement title saw some of its business prospects go up in smoke. Therefore, in addition to relieving Block Earner of the penalty obligation, the Australian judge ruled that the ASIC should cover the crypto startup's legal costs incurred after the court's Feb. 9 judgment. This favorable judgment thus reduced the financial burden on Block Earner, whose operations were negatively impacted by the ASIC's misleading press release.