Home
About Us
Retail
International OTC
Businesses
News Centre
use cobweb pay to buy bitcoin and tether in Australia

Amid much fanfare and anticipation CloudTech Group has finally come out with a release date for their highly touted CloudTechX Wallet.It is set to officially launch sometime in mid-September; the date will be confirmed as soon as all final tests are successfully run.

This entity was brought to life due to a lack of a real solution in the present Australian market for a secure storage of cryptocurrency funds which also enables swift withdrawals of holdings into AUD. At launch, CloudTechX wallet will offer multi-asset support for funds in the form of Bitcoin, Ethereum, Tether and Australian dollars- with more crypto currencies being onboarded later on.

Setting up a wallet is as streamlined as its user interface; download the app from the operating system of choice; available on both theApple App store and Google play store, create an account on it and add a government issued ID for KYC (know your customer) verification. Once verified, transfer over any crypto holdings, link a bank account and withdraw any of the holdings into AUD. Users engaging in the withdrawal service will receive realtime exchange rates of the specific crypto along with a flat 0.1% transaction fee. Another security feature is the enabling of a third-party coin tracking service which traces the transfer of funds from one account to the other and helps reduce the prevalence of illicit sources of funds.

CloudTechX wallet are officially licensed custodians of funds and the fact that the wallet exists off-chain ensures complete security for user data and especially user funds. Additionally,CloudTechX is a registered Digital Currency Exchange (DCE) with AUSTRAC which allows for the primary function of exchanging crypto to fiat and fiat to crypto.

A preview of the interface and supported cryptocurrencies.

Changing regulation in cryptocurrency in Australia

Update Time: 19 October 2023

Last week the Australian government took a small step to define the changing nature of cryptocurrency regulation in Australia via the Treasury, who has released a Proposal Paper for “Regulating Digital Asset Platforms''. The link is below:

https://treasury.gov.au/consultation/c2023-427004

It is currently under consultation - so if you are in the industry, now is the time to have your say. Let’s hope this goes slightly better than the weekend’s Referendum

The release of this paper is exciting news as it shows after a long hiatus at the helm, the OzGov has decided to try and catch up to the pack in terms of recent (and not so recent) changes in other jurisdictions - the most obvious one being Hong Kong, where the HKMA and the SFC have largely embraced vanilla cryptocurrency trading, custody and security/safety of assets and immediately gone on the offensive against a number of bad actors. This increased level of transparency is welcomed by the majority of the Australian crypto industry.

When considering this position paper, we at CobWeb Pay largely believe that "all regulation leads to transparency and sunlight is the best disinfectant." The industry won't change until the industry confronts its bad actors. Australia now lags behind the rest of the world and some movement from the government is welcome by the industry. At CobWeb Pay, we welcome this signal from the government. It indicates that they are open to discussion, they are looking for movement, and potentially we may only be 6-12 months away from greater clarity. What do the new regulations entail? Well, it’s early days and the proposal paper indicates entry into a collaborative period (hopefully) where regulators engage actively with the industry. 

In simple terms, the crypto/digital asset industry will be governed under the existing (TradFi) regulations with a few small changes, specifically around the “Minimum standards for asset holders” and the “Additional standards for token holders”. The overall aim is to ensure customer funds are adequately safeguarded, separated and secured. There is discussion also around “Combatting market misconduct in the ecosystem” which the Australian crypto industry overwhelmingly supports. All of this is definitely a step in the right direction.

There is some discussion about third party custody of assets, generally inline with other countries in terms of expecting insured/secured asset storage. Obviously the security of digital assets is, to quote the paper directly:

“The custody of bearer assets, such as digital assets, can bring about distinct risks when compared to the custody of non-bearer assets, such as most existing financial products. In the context of digital assets, the loss of access to tokens (via theft of private keys, loss of private keys, transaction errors, or damage to the systems storing private keys) can mean the irreversible loss of the entitlements linked to the tokens”

The above is an important paragraph, because it provides some leeway for digital assets to have different functionality than tradFi assets. It is both right and fair that this difference be reflected in the ways of storage and custody.

To address these risks, various technological solutions have been introduced that balance security and accessibility. ‘Cold wallets’ are offline records of private keys, ensuring heightened security. In contrast, ‘hot wallets’ store private keys on internet-connected devices, favouring speedy access over security. The need for balance has also given rise to ‘warm wallets’, smart contract wallets, and cryptographic innovations like ‘multi-party computation’ (MPC) technology.

While this paragraph reads a bit like it was copy and pasted from a CoinDesk article or blockchain 101, it will be interesting how the potential regulation will reflect these technologies. 

There is also significant concentration risk that arises with the safeguarding of tokens. Systems for safeguarding tokens are attractive targets to malicious actors. A physical or cyber intrusion can result in a person gaining access to private keys, which could be used to dispose of the tokens on any trading platform globally. This has impacts for the safety of custodial staff and the need for some safeguarding processes to remain strictly confidential. Other harms can also flow from this concentration risk. For example, where a single platform becomes the dominant custodian of a single digital asset or type of entitlement, the theft and subsequent fire sale of those assets could significantly destabilise the market.

So far, so good. Obviously a high percentage of hacks in the industry are the result of poor custody or security practices, so any change here seems long overdue. It is fair and right to include the note about concentration risk alongside potential security concerns for custodial staff - The author was once sent to Moscow to speak at a conference because the CTO held the private keys for the proceeds of a token sale and therefore felt it was unsafe for him to go. Regulators becoming more aware of the specific risks inherent in the system seems like a win. 

While including digital assets and cryptocurrencies under the existing regulatory framework may seem a bit like a “cop out” to some, it's important to understand that, that framework is largely proven and provides clear guidelines - this may allow Australia to move with greater speed and confidence once we move beyond this consultation phase. It’s also worth noting that the sums involved make crypto complying with TradFi guidelines the much more likely course rather than the creation of an entirely new set of guidelines for what (remember, is still a market in its infancy.) Let’s hope the changing regulations governing cryptocurrency in Australia provide a clear framework when they move from the proposal to implementation stage. 

The obvious next step post regulation will be a bevy of enforcement actions. This is what happened in Hong Kong. It would be curious to see who the regulators go after. Kraken recently ran afoul of the ASIC, and Binance is back in the news again having USD withdrawals cut off. There is now a significant chance that Binance getting cut off from the banking system may escalate as more dominos fall. If that’s the case, it may be that Binance is a victim of their own success. Meanwhile, more and more of the crypto market is looking at Bitcoin’s halving next year alongside news of the imminent BlackRock ETF arrival after many false starts as a surefire remedy to sour bear market.  Interesting times. 

Disclaimer: Approach cryptocurrency investments with prudence, recognising their speculative nature and inherent risks. Exercise caution during the initial stages of investment and take time to familiarise yourself with the market dynamics. Seek guidance from financial experts and employ a diversified investment strategy to mitigate potential losses.

EN