Australia’s Crypto Crackdown: Exchange Regulations Reshape Digital Asset Landscape

Down Under tightens the screws as new compliance rules hit crypto platforms.

Licensing Overhaul

Exchanges now face mandatory licensing requirements that mirror traditional finance oversight. The Australian Securities and Investments Commission (ASIC) gains expanded powers to monitor digital asset transactions.

Investor Protection Push

Platforms must implement stringent custody solutions and prove solvency reserves. Customer funds get segregation mandates that challenge current operational models.

Market Impact

Smaller exchanges scramble to meet capital requirements while established players absorb compliance costs. The regulatory clarity could attract institutional money—if the paperwork doesn't scare them off first.

Australia joins the global regulatory dance, betting that tighter rules will clean up crypto's wild west reputation. Because nothing says 'innovation' like filling out forms in triplicate.

• Australia’s Treasury proposes new draft legislation to regulate crypto exchanges and services.
• The draft will place digital asset platforms under existing financial product regulations.
• ASIC will enforce new licensing rules for crypto exchanges, expanding current regulations.

Australia’s Treasury has unveiled draft legislation that would require crypto exchanges and some regulated financial services to obtain Australian financial services licenses. Announced Thursday, the draft of the legislation is intended to place DAPs and tokenized custodial platforms under the existing regulatory regime for other forms of financial instruments. The comment period for this draft is open until 24 October 2025.

The changes are aimed at the Corporations Act 2001, and will now cover DAPs and TCPs. The aim will be to categorise them as financial products under the new regime. And that means they will be subject to the same licensing requirements and consumer protections as conventional financial intermediaries. The Treasury has stressed that its focus is on companies that hold assets for clients, not the digital tokens themselves.

Australia Strengthens Crypto Regulation

Digital assets are already regulated in line with Australia’s current financial regulations. Yet recent breakdowns of digital asset intermediaries have resulted in significant consumer losses. Treasury has pursued a fuller set of rules to deal with such abuses. Despite the framework in place, it is clear that stronger protections are necessary and this is particularly true for those who use crypto platforms as their clients.

The Treasury has reassured that DAP will be relevant to crypto exchanges and brokerages as well. It WOULD also regulate TCPs, which are platforms that have to do with tokenized physical assets. Both categories of platform would now be subject to the same regulatory regime as that which applies to (other) investment portfolio operators.

Assistant Treasurer Daniel Mulino told a recent summit held in Sydney by the Digital Economy Council of Australia that changes were proposed. He said the new framework would expand current financial services laws in a “focused way.” 

Source: Source: Digital Economy Council of Australia

The Australian Securities and Investments Commission has been identified as a central authority in which the regulations will be enforced through. The licensing requirements for the corporate to offer trading services will then fall into ASIC’s remit. 

It shall also monitor compliance such that DAPs and TCPs will conform with the new rules. The stakeholders from the industry will be able to provide their feedback during the consultation period for draft.

Australia Strengthens Crypto Rules for Safety and Growth

At present, Australian cryptocurrency exchanges are only mandated to comply with anti-money laundering (AML) and know-your-customer (KYC) laws. The scope of regulation for these platforms would be greatly expanded under this new bill. The Treasury seeks to build confidence on the part of consumers, and limit the risks run by investing in digital assets, through licensing.

Beneath the broader clamping down on crypto exchanges, ASIC has recently made a class exemption for stablecoin intermediaries. This exemption permits authorized firms to issue stablecoins without obtaining approvals for each issuer. The MOVE is indicative of the fact that while Australia is increasing regulation in some areas, it remains on the search for ways to encourage growth and innovation in industry.

The Australian push to strengthen crypto-related regulations comes in the context of international concerns around customer protections in the digital asset industry. As the market develops further, it’s evident that countries such as Australia are definitely trying to see how they can ensure the safety of consumers comes first. The fresh rules are intended to provide a safer investment landscape for investors and businesses in the crypto industry.

Now that the consultation period has been launched, Australian crypto businesses have an opportunity to contribute to proposed changes. The result of the consultation would probably determine how the crypto industry is regulated in the country in future.