Australia Proposes Leverage Caps for Crypto Settled Derivatives

Australia’s securities regulator has proposed extending leverage limits and retail investor safeguards to certain trading contracts settled in crypto.

On Monday, the Australian Securities and Investments Commission said it wants to expand the rules for contracts for difference, which let traders bet on price movements without owning the underlying asset.

The rules currently cover contracts settled in cash or by offsetting obligations between parties. ASIC wants to add contracts settled by transferring digital assets, including those tracking non crypto assets, provided they meet the other criteria for a CFD.

Fixed Expiry Futures Stay Outside the Rules

Certain crypto futures and options with fixed expiration dates would remain outside the CFD rules, the regulator said.

Existing Framework Caps Leverage and Blocks Negative Balances

Australia’s existing framework, introduced in 2021, caps leverage and requires providers to close positions when account funds fall below specified levels. Negative balance protection also limits client losses to the funds in their CFD trading account.

ASIC is seeking feedback on the proposed extension until November 9.

New Licensing Regime Arrives in 2027

Separately, Australia passed legislation in April bringing crypto exchanges and tokenized custody platforms under its financial services licensing framework, with the new regime taking effect on April 9, 2027. ASIC also required crypto firms relying on temporary relief to apply for licenses by September 30.