The March event hosted by the Australian Blockchain & AI Network (formerly Aus DeFi) brought together a mix of builders, operators, and advisers working across both blockchain and AI.
What stood out was not just what is being built, but how quickly the conversation has shifted. The questions coming from founders and operators are no longer exploratory. They are practical, immediate, and increasingly legal in nature.
Regulation Is Now Part of the Build
At the event, Madison Marcus lawyer Chris Frankish spoke to the types of questions now sitting at the centre of client conversations.
A common starting point remains:
- Is what we are building a financial product?
- Do we need an AFSL?
These are not abstract considerations. The classification of a token or platform has real implications for how it can be distributed, who can interact with it, and whether counterparties such as exchanges can support it.
In particular, the question of whether something constitutes a non-cash payment facility continues to come up. The answer often determines whether a project moves forward as designed or requires a fundamental rethink.
What we are seeing is that legal considerations are being brought forward into the design phase, rather than addressed after the fact.
Data, AI, and Where Things Actually Happen
Alongside blockchain-related questions, there is a growing layer of complexity around AI and data usage.
Many organisations are adopting enterprise AI tools and assuming that resolves privacy and compliance concerns. In practice, the position is more nuanced.
Two issues consistently arise:
- Where data is stored
- Where AI processing takes place
It is possible for data to be stored locally, while the actual AI processing occurs offshore. For organisations operating under strict data or privacy obligations, that distinction matters.
This is particularly relevant in regulated environments, where obligations are tied not just to storage, but to how and where data is handled throughout its lifecycle.
A More Joined-Up Conversation
The shift in focus at the event reflects a more joined-up way of thinking about technology.
Blockchain discussions are no longer limited to tokens or trading. They are increasingly about how processes are structured, how rules are enforced, and how different parties coordinate with one another.
At the same time, AI is being used to reduce the friction in those processes — whether that is through automating tasks, assisting with analysis, or enabling faster decision-making.
From a legal perspective, this combination introduces new considerations. It is no longer just about whether a system works, but how responsibility, control, and compliance are maintained as more of that system becomes automated.
What This Means for Clients
Across both blockchain and AI, the direction is clear.
Clients are moving from experimentation into implementation. As that happens, the legal questions become more specific and more consequential.
In practical terms, that means:
- Structuring products with regulatory outcomes in mind from the outset
- Understanding how data flows through systems, not just where it sits
- Ensuring that automation does not remove necessary oversight
These are not barriers to innovation. They are part of building something that can operate in the real world.
At Madison Marcus, we are continuing to work closely with clients across these areas, bringing together legal expertise with a practical understanding of how these technologies are being used on the ground.
Christopher Frankish: Partner, Financial Services & Compliance
Christopher is a highly accomplished financial services lawyer with expertise in governance, regulation, insurance, superannuation and dispute resolution. With over a decade of experience, he has led legal teams and major regulatory projects, including work arising from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
CONTACT CHRISTOPHER
