Australia Tightens Crypto Regulations with New Licensing Rules for Exchanges

Australia's Treasury has introduced draft legislation to bring digital asset platforms under existing financial product regulations. The proposed rules mandate crypto exchanges and custodial services to obtain Australian financial services licenses, aligning them with traditional financial intermediaries.

The Australian Securities and Investments Commission (ASIC) will enforce the new licensing framework, expanding oversight of cryptocurrency platforms. The reforms target companies holding client assets rather than the digital tokens themselves, addressing consumer protection gaps exposed by recent exchange failures.

Public comments on the draft legislation will be accepted until October 2025. The changes amend the Corporations Act 2001 to classify digital asset platforms as financial products, subjecting them to equivalent licensing requirements and safeguards as conventional financial services providers.