New framework to bring digital asset platforms under financial services rules
Australia has taken a major step toward reshaping its crypto regulation landscape with the release of draft legislation that places digital asset platforms under the same rules as traditional financial service providers. The proposal marks what Assistant Treasurer Daniel Mulino called “the cornerstone of our digital asset roadmap”.
Currently, most crypto exchanges in Australia only need to register with the Australian Transaction Reports and Analysis Centre (AUSTRAC). With over 400 registered entities, many remain inactive, and oversight has been limited. The draft law would change this by requiring exchanges to hold an Australian Financial Services Licence (AFSL) under the Corporations Act.
Two new financial products introduced
The legislation introduces two new categories:
- Digital Asset Platform
- Tokenized Custody Platform
These designations will bring exchanges, custodians, and related businesses under the direct supervision of the Australian Securities and Investments Commission (ASIC). According to Mulino, the rules include “targeted obligations for wrapped tokens, staking, and custody standards.”
Strong penalties, but exemptions for small players
Under the draft, violations could attract penalties of up to AU$16.5 million ($10.8M) or 10% of annual turnover, whichever is higher. However, platforms holding less than AU$5,000 ($3,300) per customer and facilitating under AU$10 million ($6.6M) annually would be exempt, a move designed to avoid burdening smaller, low-risk operators.
Mulino stressed that the reforms aim to “legitimize the good actors and shut out the bad”, adding that failures of digital asset firms have highlighted consumer risks where assets were mishandled without safeguards.
Industry reaction: broadly supportive
Major exchanges welcomed the move. Swyftx CEO Jason Titman said the industry should not fear high standards, calling the framework “sensible and balanced.” OKX Australia CEO Kate Cooper emphasized the importance of enforcement to protect licensed players from being undercut by unregulated rivals.
Crypto.com Australia’s Vakul Talwar added the draft was “long overdue”, while Kraken Australia’s Jonathon Miller cautioned against a one-size-fits-all approach that could hurt smaller innovators.
The Treasury has opened the draft for consultation until October 24, inviting feedback from stakeholders before finalizing the rules.
If passed, this legislation will provide greater certainty for investors, stronger consumer protections, and a clearer regulatory path for exchanges operating in Australia.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.