Australia has passed a new law that will bring crypto exchanges and custody platforms under the country’s mainstream financial services regime, requiring many operators to obtain an Australian Financial Services Licence and comply with tailored conduct, disclosure and asset-holding rules. Parliament’s website shows the Corporations Amendment Bill 2025 cleared the Senate on 1 April after passing the House in February, marking the country’s most comprehensive statutory move yet to regulate digital-asset intermediaries. The measure is designed to close a gap that has long allowed platforms to hold client digital assets without a bespoke licensing framework comparable to other parts of finance. The Parliamentary Library’s digest says the bill defines digital asset platforms and tokenised custody platforms, treats them as financial products for regulatory purposes, and subjects them to the general obligations of financial services law alongside more specific duties reflecting the risks of custody and platform operation. Those duties include licensing, consumer protection standards and minimum requirements tied to asset holding and disclosures.
A six-month licensing window sits at the centre of the change. The law is set to commence 12 months after Royal Assent, and businesses are given an 18-month runway to comply with the new licensing and operational standards, which in practice includes the six-month transition period for existing operators to apply for or vary an AFSL. Legal analyses of the enacted framework note that firms applying within that transition period are expected to receive transitional treatment while ASIC processes applications, reducing the risk of an abrupt market freeze.
Canberra’s approach is not a blanket attempt to regulate all blockchain activity. The legislation is aimed mainly at intermediaries that hold or manage assets for consumers, rather than at the underlying technology itself. Treasury’s consultation material and the parliamentary summary both indicate the regime focuses on digital asset platforms and tokenised custody structures, while leaving the existing treatment of underlying tokens largely intact unless they already fall within financial product rules. That distinction is important for a market where exchanges, custodians, token issuers and software developers often perform overlapping roles.
The framework also preserves exemptions intended to prevent overreach. Parliament’s digest points to a low-value carve-out and an incidental-activity exemption, reflecting a policy effort to spare genuinely small or experimental operations from full-scale compliance at the earliest stage. Earlier Treasury proposals said the low-value threshold would apply where a facility held less than A$1,500 per customer and less than A$5 million in total, a signal that lawmakers wanted to encourage limited innovation while capturing platforms with meaningful retail exposure.
Supporters of the new regime argue that formal licensing was overdue. ASIC has repeatedly warned about regulatory gaps around digital assets, saying rapid innovation and unclear boundaries create risks ranging from misleading conduct to unlicensed financial activity. The regulator’s 2026 key issues outlook singled out digital assets as part of the perimeter problem in Australia’s financial system. Treasury has also framed the broader digital-asset agenda as a way to support innovation while making the sector safer for consumers.
The case for tougher oversight has been reinforced by enforcement actions. Last week, a federal court ordered Binance’s local derivatives unit to pay A$10 million after ASIC said more than 85 per cent of its local customers had been misclassified, exposing retail clients to high-risk crypto derivatives without proper safeguards. Reuters reported that affected investors suffered millions of Australian dollars in losses and fees. The episode gave lawmakers a timely example of how conduct failures in digital-asset businesses can spill directly into retail harm.
Yet the law does not settle every concern. The Parliamentary Library flagged complaints from some industry participants that the framework could impose heavy administrative burdens on smaller or specialist operators and may still leave uncertainty around where digital asset platforms end and other regulated structures begin. It also noted that the minister and ASIC are being given significant power to expand parts of the regime through legislative instruments, a flexibility supporters see as necessary in a fast-moving sector but critics view as a potential source of regulatory unpredictability.
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Cryptocurrency