Fred Schebesta, co-founder of Finder.com.au and often referred to as Australia’s ‘Crypto King,’ has recently voiced strong criticisms against the country’s regulatory approach to cryptocurrencies. He argues that excessive regulation stifles innovation and hampers economic growth, advocating for a more balanced and progressive framework to foster the burgeoning crypto industry.​
In a recent interview, Schebesta expressed his concerns about Australia’s stringent regulatory environment, likening it to a ‘nanny state’ that hinders entrepreneurial endeavors. He emphasized the need for a reduction in bureaucratic red tape, drawing parallels to the regulatory reforms implemented under former U.S. President Donald Trump’s administration, which he believes spurred innovation and prosperity in the United States. ​
Schebesta’s critique is not merely theoretical; his company, Finder.com.au, has faced legal challenges from the Australian Securities and Investments Commission (ASIC) over its cryptocurrency product, Finder Earn. ASIC alleged that the product was a debenture requiring an Australian Financial Services License, a claim that Finder disputes, arguing that digital assets should be considered property rather than money. ​
Australia’s regulatory framework for cryptocurrencies has been a topic of extensive debate. ASIC maintains that regulation and enforcement are essential to foster trust within the financial system, including the crypto sector. The commission views many crypto assets as financial products, thereby subjecting them to existing financial services laws. ​
However, this perspective has led to concerns within the industry. Some stakeholders argue that categorizing a broad range of crypto assets as financial products imposes significant compliance burdens, potentially driving innovation offshore. An incident at an Australian crypto summit, where a fire alarm interrupted proceedings, was symbolically interpreted by attendees as a reflection of the industry’s precarious position amid regulatory uncertainties. ​
Schebesta is not alone in his call for regulatory reform. Industry experts and legal analysts have highlighted the need for a balanced approach that protects consumers without stifling innovation. They argue that while regulation provides necessary consumer protection benefits, it must also allow freedom for technological advancement and entrepreneurial initiatives.
The Australian government has shown some willingness to engage with the crypto industry. Recent consultations have explored regulatory frameworks for crypto asset service providers, digital asset exchanges, and payment systems, aiming to clarify the legal landscape and support innovation. ​
Globally, regulatory approaches to cryptocurrency vary widely. Schebesta points to the United States under Trump’s administration as an example where deregulation fostered a thriving crypto ecosystem. However, it’s important to note that the U.S. regulatory environment is complex and varies by state, with ongoing debates about the classification and regulation of digital assets.​
One of the industry’s primary concerns is the lack of clear and specific guidelines tailored to the unique characteristics of digital assets. The current application of traditional financial regulations to cryptocurrencies can lead to confusion and unintended consequences. Legal experts argue that without a nuanced approach, Australia risks falling behind in the rapidly evolving global crypto landscape. ​
The Reserve Bank of Australia (RBA) has been exploring the concept of Central Bank Digital Currencies (CBDCs). While the RBA acknowledges that a retail CBDC would represent a significant change to Australia’s financial arrangements, it currently assesses that the potential benefits appear modest or uncertain relative to the challenges it would introduce. ​
Despite regulatory challenges, Australian entrepreneurs continue to innovate within the crypto space. For instance, Ed Craven, co-owner of the cryptocurrency-friendly online casino Stake.com, has adapted to regulatory environments by increasingly accepting traditional fiat currency, now accounting for 70% of transactions. This strategic shift demonstrates the industry’s resilience and willingness to navigate complex regulatory landscapes to sustain growth. ​
Fred Schebesta’s criticisms highlight a critical juncture for Australia’s cryptocurrency industry. The challenge lies in striking a balance between necessary regulation to protect consumers and fostering an environment conducive to innovation and economic growth. As digital assets become increasingly integral to the global financial system, Australia’s approach to regulation will significantly impact its position in the international crypto market. Engaging in open dialogues with industry stakeholders, adopting clear and tailored regulatory frameworks, and learning from international counterparts may pave the way for a thriving and innovative crypto ecosystem in Australia.
