AUSTRAC’s strong approach is much needed, to protect and improve the DCE landscape in Australia. They’re encouraging non-operational exchanges to deregister voluntarily, or else be deregistered through cancellations. 427 registered exchanges? Yikes, now that does sound like a fertile environment for nefarious deed. And nobody wants their hard earned money supporting scams or money laundering operations. Let’s take a closer look though, would you?

Forgotten Voices, Silenced Dreams?

These are all wonderful objectives, but are we losing sight of the forest for the trees? Are we really thinking through what this crackdown means, especially for new artists from the Southeast Asian diaspora? No, you see, for many of these creatives, cryptocurrency isn’t just a speculative investment, it’s a lifeline.

Imagine this: you're a painter in rural Vietnam, creating breathtaking landscapes inspired by your surroundings. The problem with traditional art galleries is they’re extremely inaccessible, gatekept by geography and most importantly, by established networks. Banks? Forget about it. With fees and red tape galore, opening an international account is a bureaucratic nightmare. Then, you learn about NFTs and cryptocurrency exchanges. All at once, your art is able to be seen by a worldwide audience. Show and sell your art directly to collectors across Europe, North America and Australia. Cut out old gatekeepers, get paid immediately in cash, and spend less on fees than you pay for wires through the banking system!

This isn't hypothetical. This is the case for thousands of artists all across Southeast Asia. And they’re taking advantage of platforms like Binance, or any other exchange to really pursue their career. In doing so, they unlock funding opportunities and gain access to a growing, global community. These platforms grant homegrown creators a fair chance, so they can have competitive opportunities against rich country artists.

Rather, AUSTRAC is ramping up its oversight of these exchanges. This increased scrutiny imperils their shutdown or limitation, jeopardizing a crucial lifeline for users. So in our zeal to stamp out financial crime, are we doing the opposite and pulling the rug out from under these artists? Are we continuing to place the concerns of rich speculators above the economic well-being of undercapitalized creatives?

Regulation's Unexpected Victims Exist

Think about the implications. Yet a needless blanket crackdown can smother the potential for innovation. Furthermore, it risks driving legit users onto unregulated marketplace, which counterintuitively increases the chance of illicit activity occurring. It's like trying to drain a swamp by filling it with concrete – you might get rid of the mosquitos, but you'll destroy the ecosystem.

AUSTRAC’s CEO, Brendan Thomas, stresses the need for an accurate register and to make sure only legitimate businesses are operating. It's hard to argue with that! It's important! Lastly, the definition of “legitimate” needs to be broad. Yet it must not override the interests of those who rely on these platforms for their economic empowerment. Is a modest intercultural exchange enabling art sales from Southeast Asia ontologically different? It’s just as valid as a global exchange focused on high-net-worth individuals. It's a matter of perspective.

What occurs when the barriers to entry are raised so high no one can breach them? For artists dependent on crypto to stay alive, this will send them back underground. Otherwise, they will find themselves shut out from the international art market and forced to rely on exploitative middlemen yet again. This is the true danger – shutting down the comment period for the people who should have the loudest voices.

A Call For Nuance Now!

This isn't about being pro-crypto or anti-regulation. It's about recognizing the complex realities of the digital economy and adopting a nuanced approach that protects consumers without crushing the dreams of emerging artists. We need to ask ourselves:

  • Can AUSTRAC engage with the crypto community to develop more targeted regulations that minimize the impact on legitimate users?
  • Can they provide resources and support to help smaller exchanges comply with regulations, rather than simply forcing them to shut down?
  • Can they work with international organizations to promote financial inclusion and empower artists in developing countries?

The truth to all these questions is affirmative, only if there’s the political will to make it happen.

Let’s move past the facile notion that “crypto is synonymous with crime.” Equity is more than an end goal. It’s worth recognizing that the smart technology’s potential to promote equity isn’t always obvious. Let’s not have Australia’s crypto crackdown turn into another case of them being justly criticized when good intentions pave the road to unintended consequences. These artists’ voices should be at the forefront of our industry, and their dreams should be celebrated, not stomped on. Champion them, while there’s still time.

Think about signing their petitions, reaching out to your local policymakers, and supporting Southeast Asian artists by donating to them directly through their websites. Their economic and creative futures depend on this long-awaited decision. It can also decide who has equitable access to the emerging global digital economy.