Australian Government Clamps Down On Crypto Exchanges And Custody Platforms With New Legislation
The Australian government has introduced new legislation that could unlock $24 billion in annual productivity gain while imposing large penalties on crypto exchanges and custody platforms that fail to protect customer assets.
The Treasury has submitted the Corporations Amendment Bill 2025 to the parliament, following the circulation of a draft bill during its September consultation.
“We take Australia’s crypto industry seriously, and we know that blockchain and digital assets present big opportunities for our economy, our financial sector, and our businesses,” the officials said in a statement.
The bill has been moved to a second reading, which is a procedural step where Parliament debates a bill’s general purposes before detailed examination.
Crypto Service Providers Will Move Under Financial Services Regime
With the proposed bill, the Australian government aims to bring crypto services under the financial services regime.
If approved, the bill would mandate crypto platforms and tokenized custody platforms to hold an Australian Financial Services License (AFSL).
In an explanatory memo alongside the bill, the government said that digital assets would be “subject to the same general legal frameworks as other assets including property, consumer, insolvency, criminal, family and tax laws.”
The Treasury also said in a recent statement that the bill aims to bring crypto operations into the same consumer protection and conduct regime that governs traditional financial services.
Assistant Treasurer Daniel Mulino added that “millions” of Australians are investing in crypto annually, and that the proposed legislation is about “making that as safe and secure as possible.” Mulino mentioned that the legislation will also focus on “encouraging innovation.”
The proposed framework will apply across both crypto assets such as Bitcoin and stablecoins, and tokenized real-world assets.
The legislation also builds on earlier efforts by the Australian and Investments Commission (ASIC), which clarified last month how tokenized financial products slot into existing laws. ASIC had signaled intentions to introduce stricter enforcement for unlicensed crypto business models.
Earlier this month, ASIC Chair Joe Longo also said that the country must capitalize on the opportunity presented by tokenization or risk being “left behind.”
AFSL Obligations Will Be Tailored To Unique Structures Of Crypto Businesses
In addition to needing an AFSL license, the new bill would require licensed crypto platforms to act “efficiently, honestly and fairly.”
They will also need to provide clear disclosures on how customer assets are stored, as well as maintain robust governance and risk controls, and avoid misleading conduct. Additionally, these platforms will have to offer dispute-resolution and compensation mechanisms.
The AFSL obligations would, however, be tailored to reflect the unique structures of crypto businesses. For instance, smaller platforms, such as those holding less than $3,263 per customer and facilitating less than $6.5 million in annual transactions, would be exempt.
That mirrors the exemptions for other low-risk financial products such as non-cash payment facilities.
The exemptions for smaller crypto platforms are in place to allow early stage experiments to proceed without having to go through the entire licensing process from day one.
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