The Australian Treasury has released a draft law requiring cryptocurrency exchanges and certain service providers to obtain a financial services license to operate. This regulation, open for public consultation until October 24, 2025, aims to expand existing legislation by classifying crypto platforms as financial products.
Cryptocurrency and Tokenized Custody Platforms Recognized as Financial Products
According to the draft, Cryptocurrency Platforms (DAPs) and Tokenized Custody Platforms (TCPs) will be categorized as financial products. This involves amendments to the Corporations Act of 2001, placing cryptocurrency trading platforms and brokers, along with infrastructures storing tokenized assets, under the same legal framework as traditional financial intermediaries, such as investment portfolio managers.
The Treasury emphasized that the new regulation’s focus is on the businesses that hold these assets on behalf of customers, rather than the cryptocurrencies themselves. The announcement highlighted that while cryptocurrencies are already evaluated under existing regulations, recent failures of intermediary companies have led to significant investor losses.
The proposal assigns the Australian Securities and Investments Commission (ASIC) with the responsibility for the licensing and supervision process. ASIC will ensure these platforms comply with their legal obligations by providing financial service licenses.
Aiming to Strengthen Investor Protection
One of the first official statements regarding the draft was made by Assistant Treasury Minister Daniel Mulino at the regulatory summit organized by the Australian Digital Economy Council. He stated that the new framework would be implemented through a targeted expansion of existing financial services laws.
Under current laws, cryptocurrency exchanges in Australia were subject only to anti-money laundering (AML) and know-your-customer (KYC) requirements. The new regulation, underpinned by a licensing requirement, aims to make these obligations more comprehensive, thereby enhancing the security of investors’ assets and ensuring the market operates under more transparent conditions.
Additionally, ASIC announced last week a limited exemption allowing licensed brokers to distribute stablecoins. Although this decision introduces a more flexible approach to the stablecoin market, the overall regulatory draft indicates the commencement of a more stringent oversight process in the cryptocurrency sector.
