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ARTICLE · 08 JUNE 2022

Under lock and key? Regulating private key custody in the crypto industry

Corrs Chambers Westgarth
Corrs Chambers Westgarth
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Discuss the model & alternatives proposed by the recent consultation paper & some key implications for industry.

AustraliaTechnology
Steven Rice
Steven Rice
James North
James North
Mizu Ardra
Mizu Ardra
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Following the release of a Treasury Consultation Paper (TCP), submissions to which closed last week, the Federal Government will consider feedback on a proposed licensing regime that would regulate digital currency exchanges and impose obligations on the custody of private keys, similar to the Australian Financial Services Licence (AFSL) regime.

Private keys are strings of characters that allow the holder to execute full control over the crypto assets contained in the corresponding wallet. Many digital currency exchanges (DCEs) store users' private keys to a range of underlying wallets, allowing them to trade a variety of crypto assets while only needing to remember a single password to their account.

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