Australia Moves to Regulate Crypto Platforms Under New Financial Services Bill

Quick Breakdown 

• Australia introduces a bill requiring crypto platforms and custody providers to obtain an AFSL and meet ASIC standards.
• The legislation aims to close consumer protection gaps exposed by past crypto failures and to regulate activities involving the holding of client assets.
• Small operators are exempt, and an 18-month transition period will give platforms time to comply.

 

Australia is tightening oversight of its digital asset sector with a new bill that would bring crypto platforms under existing financial services laws, a shift aimed at protecting consumers and strengthening industry standards.

Government pushes for stronger guardrails

Assistant Treasurer Daniel Mulino tabled the Corporations Amendment ( Digital Assets Framework) Bill 2025 on Wednesday, describing it as a critical step in aligning Australia with global developments in digital finance.

Mulino stressed that the country must “keep pace” with technological shifts, adding that clear rules can attract investment, create jobs, and support innovation.

The move follows a Treasury-led consultation on a draft version of the bill released in September, which received cautious industry support but also calls for more straightforward guidelines and simplified compliance requirements.

Closing loopholes and protecting customer assets

Highlighting the risks exposed by past crypto scandals such as FTX, Mulino noted that companies can currently hold “unlimited” amounts of client crypto without meaningful safeguards.

The new bill targets this gap by regulating activities rather than the technology itself. Platforms that hold digital assets on behalf of customers would be subject to robust standards for transactions, settlements, and asset protection. They must also provide clients with transparent information on services, fees, and risks.

While nearly 400 platforms are registered with AUSTRAC, many are inactive, and none are required to meet the higher bar set by the Australian Securities and Investments Commission (ASIC) unless they handle regulated financial products like derivatives.

New licensing framework with room for small players

The bill introduces two newly defined financial products, the digital asset platforms and tokenized custody platforms, both of which must obtain an Australian Financial Services License (AFSL).

Those offering crypto advice, dealing services, or arranging platform access would now be classified as financial service providers, tightening the regulatory net.

However, “small-scale” operators with annual transaction volume of less than AUD 10 million ($6.5M) are exempt, as are businesses whose crypto services are incidental to their primary operations.

To ease the transition, the bill includes an 18-month grace period before licensing becomes mandatory. With the Labour government holding a comfortable majority in the House, the bill is expected to pass quickly before moving to the Senate, where crossbench support may be needed.