Login
The crypto space is ‘changing rapidly’
While there have been a number of regulatory developments in the crypto space in recent years, it’s still an ever-evolving area with a lot of “moving parts”, this partner explained.
Lauren Croft
Daniel Knight is a partner at K&L Gates based in Melbourne. Speaking recently on The Lawyers Weekly Show, Mr Knight explained what kind of legislative and regulatory challenges are on the horizon for lawyers working in the crypto and tech space — and how they can be overcome moving forward.
While there are a number of regulations around open banking and crypto trading already in place, Mr Knight said changes will definitely still occur within this space — and that a key challenge is keeping up with that change.
“I think that’s a real challenge with the pace of change that we’re experiencing. And I think that makes it even more important that whatever the new laws look like, they need to be principles-based again, and that they need to be technology agnostic. So just because the current use cases look a particular way, doesn’t mean that that’s what they’re going to look like in the future,” he explained.
“We’ve already seen with open banking, for example, that the initial rules were very prescriptive and had a particular model of operating in mind, and they’ve already been expanded to provide for a broader range of operating models, so that’s positive. And I think that we’ll need the same with the payments and the crypto approaches, so that they can evolve and develop as the technology evolves as well.”
The introduction of new legislation will also have a number of impacts on lawyers working in this space, Mr Knight noted.
“This is an increasingly complex area, and it’s certainly changing rapidly. So, it’s an area where I think there’s a need for more lawyers with deep experience in this space, for sure. I think whenever there’s a regulatory change, that means there’s something else for a business to get their heads around.
“But I think the potential here is that the next move, particularly in crypto, will clear up some uncertainty, provide some greater clarity. And so that would certainly be welcome for me and my clients. Certainty of how they can move forward,” he added.
“I think there’s appetite to legislate, particularly in relation to crypto, because of the consumer protection angle. And I think the crypto challenges, more broadly, are probably amplifying the need for that rather than anything else. So, I think that’s an agenda that will be pursued and continue to be pursued.”
And moving forward, Mr Knight said he’s looking forward to a number of things within this space, both in a personal and professional context.
“We’ve been waiting for some time for new laws on payments and a crypto regime. I think it’ll be great to see that actually bear fruit and come to fruition. And I think my clients are all, in the crypto space, certainly are all eagerly anticipating licencing because of the legitimacy as well that it can bring to the industry, and the protection that it can bring for consumers. No one wants to see the sorts of collapses that have been happening in the last few days in crypto markets, and a landscape that better protects consumers is certainly welcome,” he said.
“I mean, you don’t find yourself in a career as a regulatory lawyer without enjoying the regulatory analysis that I do every day. And so, for me, what I love about my job is the fact that it keeps changing, and there [are] always new issues to be thinking about, new products and new clients doing new things, fitting those into the existing legal framework. So certainly, that aspect of the job keeps changing, keeps it interesting.
“I would add that the current regulatory reform agenda is pretty ambitious. [There are] a lot of moving parts. And thankfully they are being coordinated, looked at together as a package across crypto and payments, certainly because of the significant overlap, particularly as it relates to the stablecoins and other emerging token types. But I think it is an ambitious program, but it’s certain we’re in for a period of significant regulatory change, I think.”
The transcript of this podcast episode was slightly edited for publishing purposes. To listen to the full conversation with Daniel Knight, click below:
Lauren Croft
Lauren is a journalist at Lawyers Weekly and graduated with a Bachelor of Journalism from Macleay College. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications and Travel Weekly. Originally born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling. She is also a keen snowboarder and pre-pandemic, spent a season living in a French ski resort.
