Crypto City guide to Sydney: More than just a ‘token’ bridge

Fast facts

City: Sydney

Country: Australia

Population: 5.2 million

Established: 1788

Sydney is Australia’s first, oldest and second-most populous city (just), world-famous for its harbor views and iconic landmarks, such as the Opera House and Harbor Bridge — affectionately nicknamed “The Coathanger” by locals. The Harbor City’s second-most notable feature is 100 beaches across the metropolitan area with Bondi Beach the best known.

Located on Australia’s east coast, Sydney was established as a penal colony for the British Empire, which needed somewhere to transport criminals after losing control of its colonies in the American Revolution. It’s probably no surprise then it earned the moniker “Sin City” in the second half of the 20th century due to rampant organized crime that corrupted judges, the top brass of the police and, maybe less surprisingly, politicians.

On a global scale, Sydney is fairly young and architecturally contemporary, which saw it play backdrop to The Matrix, as a major location in Mission Impossible 2 and a starring role in the plot of Finding Nemo (no, 42 Wallaby Way, Sydney doesn’t exist). Sydney is Australia’s financial hub, has the third largest immigrant population globally, and boasts the second most unaffordable housing in the world behind Hong Kong.

Sydney’s crypto culture

Sydney saw an early interest in cryptocurrencies that still carries on today. Blockchain Sydney has been consistently getting together since 2013, and it currently meets twice a month at various pubs around the city. Blockchain Professionals, formed in 2014, also still meets up about once a month.

The Australian DeFi Association, while only launching in early 2022, has become a highly attended and consistent monthly hangout for local crypto industry players and enthusiasts.

Co-founder Mark Monfort originally created it for online discussions but says it soon morphed into an IRL meetup held between the larger “one-off” blockchain events, such as those by Blockchain Australia.

“We wanted to be the ‘gap filler’ between other meetups because what we saw was that there wasn’t really a place for direct conversation apart from Crypto Twitter.”

Monfort maintains a calendar of Web3 events and meetups going on around Sydney and Australia. Other popular meetups include Bitcoin Sydney, Hyperledger Sydney and Sydney AI Web3 (which added artificial intelligence in line with the recent AI boom), while NFT Sydney and Metaverse Sydney typically don’t meet as often.

As the country’s financial hub, Sydney boasts a thriving startup culture. Many crypto-related events are held in the various co-working offices around the city that also serve as a base for numerous crypto and fintech startups. One provider, Stone & Chalk, runs a Web3 Innovation Centre within the government-supported Sydney Startup Hub, and local exchange Independent Reserve has run a blockchain business accelerator since 2018.

Blockchain Week, the flagship event of Blockchain Australia, invariably holds at least one day of the program in Sydney, typically at the Exchange Centre — the home of the Australian Stock Exchange (ASX).

Sydney’s crypto projects and companies 

Sydney’s crypto players are diverse, and there’s likely a company involved in every niche of the market. “There’s a lot of innovation that’s coming out of this town — much more than you see on a global stage,” says Monfort, who also is a co-founder of the Web3 advisory firm NotCentralised.

NFT horse racing and betting game Zed Run was created here by Virtually Human Studios (before it moved to Melbourne) and so was Find Satoshi Labs’ move-to-earn app StepN. Fellow NFT gaming companies Illuvium and Immutable are also in Sydney (as much as a decentralized organization can be). Sigma Prime, is behind Lighthouse, the widely adopted Ethereum client.

Compared to Melbourne, there aren’t as many exchanges or trading platforms based in the city. Sydney plays host to significant parts of the Ethereum-based token trading platform Synthetix, the DeFi-backed fintech Block Earner is based here along with the centralized exchanges Independent Reserve and CryptoSpend.

The Redbelly Network operates the blockchain of the same name, which was originally birthed at Sydney University alongside government researchers. Smart Token Labs, creator of the open-source wallet AlphaWallet and crypto wallet creator Verida, both have their HQs in Sydney.

The city also hosts Block8, which helps develop blockchain products, Soulbound token development and advisory business Soulbis, Filecoin-powered data storage provider Holon, along with the Tide Foundation, which offers a cybersecurity solution that’s based on blockchain.

Comparison site Finder operates a crypto exchange, and its founder, Fred Schebesta, dabbles with his blockchain investment fund Hive Empire, also Finder’s holding company. Schebesta owns the Crypto Castle in Coogee, which he bought for $11.5 million (17 million AUD) in May 2021 — it’s rented out for photoshoots and events and listed on Airbnb for an exorbitant nightly price.

Venture firm Airtree VC has partnered with its share of Web3 firms and is based in the inner-city suburb of Surry Hills, while the Web3 recruitment business CryptoRecruit is out in Bondi. Web3 data platform Itheum made a home in Sydney. Stirling & Rose and Piper Alderman both have specialist crypto lawyers.

Sydney’s financial infrastructure

Sydney was home to Australia’s first-ever Bitcoin ATM, which went live inside a mall in the city center on April 15, 2014. The ATM was purchased from RoboCoin, the firm responsible for setting up the world’s first Bitcoin ATM in Canada around six months earlier. Sydney’s ATM was the 11th from RoboCoin to launch worldwide.

Today, over 100 Bitcoin ATMs, nearly a fourth of the roughly 500 in Australia, are dotted around the central business district and outer suburbs of Sydney according to Coin ATM Radar and are operated by a handful of companies. Users can only sell crypto at 14 of them, however, and those are predominantly based in the city center.

Sydneysiders, like all Australians, have access to multiple local exchanges as well as international ones with local entities in the country. A handful — namely CoinJar, Crypto.com, CoinSpot, Wirex and CryptoSpend — provide debit cards, offering crypto “cashback” or allowing crypto to be spent directly.

Crypto isn’t widely used for payments or sending funds. Sending smaller monetary amounts through TradFi rails in Australia is typically instant and free, operates 24/7, and only needs a phone number or email thanks to the New Payments Platform, which everyone just calls PayID. The Australian central bank governor Philip Lowe has even said in the past he’s “skeptical” on the need to issue a retail central bank digital currency: “How could we offer digital tokens which would be better than that?”

The relationship between crypto companies and banking or payment providers is still tenuous. In May 2023, Binance Australia’s payments provider Zepto was forced to offboard the exchange by its payments enablement partner Cuscal.

Westpac, one of the country’s “Big Four” banks, also began blocking payments to crypto exchanges on the same day Binance was debanked. Shortly after, the Sydney-based Commonwealth Bank (Australia’s largest bank) said it would begin declining or temporarily holding payments to crypto exchanges and impose a $10,000 monthly cap on the amount of money its customers could send to exchanges.

The banks vaguely cited issues with scams when asked to explain their respective actions.

Where can I spend crypto?

There are only a handful of places in Sydney left where you can spend crypto. Coinmap claims there are roughly 25 venues that take digital currency payments near the city, which get even more sparse when traveling to the outer suburbs (in total there are about 40).

The majority of venues appearing on Coinmap have shut down, and of those still standing, many no longer take crypto payments. A lack of uptake by customers was the consensus for getting rid of crypto payments as explained by multiple venue owners.

Of those still around that accept crypto, you can grab a brew at Cat and Cow Coffee in Clovelly. The aptly named Bitcoin Rocket Cafe in Redfern takes Bitcoin over the Lightning Network for its coffees and Bánh mìs. The cafe’s owner, Samantha Ho, said she charges a higher fee for those spending under $13 (20 AUD) when paying by Lightning and estimated around five in 100 customers actually pay using Bitcoin.

There are a variety of stores that accept crypto when ordering online. You can order a new skateboard from Boardworld, which has shops in the inner west suburbs of Newtown and St Peters. Retro Girl will accept Bitcoin for their vintage wares, or you can grab some (very expensive) lingerie at Babylikestopony, which also has a shop in Paddington.

Under the bridge is Bar Lulu, which operates CryptoLulu, an NFT-gated membership club that claims to offer private lounges, networking events and other benefits at the venue for NFT holders. While you can of course pay for the NFT membership using crypto, the bar itself doesn’t take crypto payments right, now but that’s apparently coming soon.

Controversies and collapses

For many years, there was much excitement about the ASX implementing a blockchain-backed solution for its clearing and settlements system. It first announced the plans in 2017, but it suffered multiple delays. Five years on and $170 million later, the ASX canned the project in late 2022 to much scorn from the central bank and the securities regulator.

The Australian Securities and Investments Commission (ASIC) has undertaken its share of enforcement actions in the crypto space against Sydney businesses. It sued Block Earner in November 2022, claiming the latter offered crypto-based yield products without a license. ASIC hit comparison website Finder with a similar suit a month later, and the regulator claims Finder shut down its crypto-yielding products a month earlier because of its concerns.

In April 2022 after a “targeted review,” ASIC canceled the financial license of Binance Australia Derivatives (Oztures Trading), the futures business of the exchange. ASIC also claims it was sniffing out the Sydney-headquartered Australian entity for FTX months before the global company collapsed in November 2022. FTX Australia was able to gain a local financial license by taking over a company that already had one, a loophole that ASIC chair Joe Longo wants to close.

Holon was similarly whacked by ASIC in October 2022, which put a stop to crypto ETFs investing in Bitcoin, Ether and Filecoin. Holon later bailed on the idea altogether.

In late 2020, ASIC also unleashed a raft of charges against John Biggaton, a promotor of the infamous BitConnect Ponzi scheme. Conspiracy theories about Biggaton have been spun up after his wife, Madeline Bigatton, mysteriously disappeared in March 2018. She was suspected to have committed suicide at The Gap, a location infamous for such acts, but it’s a narrative that her family doubts.

Sydneysider Kathryn Nguyen is widely believed to be the first person charged with the theft of crypto assets in Australia. She was sentenced to two years in jail after stealing around 100,000 XRP in January 2018. The alleged Sydney-based Ponzi scheme Metafi Yielders is said to have stolen $135 million, but after it collapsed, the chief executive of the business, Michael Daher, claimed he was just a fall guy, and the real schemers were in Nigeria.

The Commonwealth Bank has seemingly done a 180 on its crypto stance in a relatively short time. In November 2021, it was gearing up to ship crypto trading within its banking app. At the time, its CEO, Matt Comyn, said the bank saw “bigger risks in not participating” in crypto and, in May 2022, was still seemingly trying to squeeze the product past regulators. But just over a year and a half later, the bank began censoring payments to crypto exchanges.

The controversial Satoshi claimant Craig Wright used to live in Sydney, and his house was notoriously raided by federal police in 2015 due to a warrant issued by the tax authorities, but he now lives in the United Kingdom.

Crypto education in Sydney

A few higher-ed institutions offer courses or units of study on blockchain and Web3. Sydney’s first university, the University of Sydney, offers a unit on “Cryptocurrency Markets and Investments.” It also does a course on blockchains and cryptography as part of its Master of Cybersecurity. 

Sydney Uni along with the CSIRO (a federal government scientific research agency) developed the Redbelly blockchain, which aimed to create a “fork-proof” network. The project was spun out of the uni into its own commercial entity in December 2021.

The University of Technology Sydney (UTS) offers a free two-hour online course on the basics of blockchain tech, while the University of New South Wales (UNSW) offers postgraduate and undergraduate courses on “Web3 and Blockchain Applications.” UNSW’s course on cryptocurrency and DeFi is a core course as part of its postgraduate major in fintech.

For those willing to pay $235 (350 AUD) to sit in a classroom for nine hours to learn the basics of crypto, blockchain and how to trade, then the Sydney Community College has a course aimed at introducing you to crypto and blockchain — although this carries no accreditations like the others.

UNSW and Sydney Uni have a student-led society that semi-regularly hosts events and meetups called the University Network for Cryptocurrency and Blockchain.

In May 2022, UNSW received $4 million worth of USDC from Ethereum co-founder Vitalik Buterin for the development of a pandemic-detection tool.

Notable figures

Synthetix founder Kain Warwick; Illuvium co-founders (and Kain’s brothers) Aaron and Kieran Warwick; Finder co-founder and Crypto Castle owner Fred Schebesta; Block Earner co-founder Charlie Karaboga; Australian DeFi Association co-founders Mark Monfort and Arturo Rodriguez; Kraken Australia managing director Jonathon Miller; Web3 blogger Joan Westenberg; KPMG director of metaverse Alyse Sue; StepN creator ​​Jerry Huang; Algorand Foundation governance manager Adriana Belotti; Haymarket HQ CEO Duco Van Breeman; Immutable co-founders Robbie and James Ferguson, Independent Reserve co-founder Adrian Przelozny ; Virtually Human co-founder and Zed Run creator Chris Laurent; Global X ETFs AU CEO Evan Metcalf; Block8 co-founders Kim Bartlett, Alan Burt and Tim Bass; CryptoRecruit founder Neil Dundon; Koinly head of tax Danny Talwar; Coinbase APAC managing director John O’Loghlen; Arkon Energy co-founder and CEO Joshua Payne; Smart Token Labs co-founder and CEO Victor Zhang; Holon co-founder Heath Behncke; Crypto lawyers Nick Abrahams and Michael Bacina (the latter is also the Blockchain Australia chairperson), Ethereum Smart Contract developer and community educator Bokky Poobah.

Cointelegraph team members and contributors based in Sydney: Felix Ng, Brayden Lindrea, Ciaran Lyons and Jesse Coghlan.

If you have suggestions for additions to this guide, please email: jesse.coghlan@cointelegraph.com.