Australia's Treasury dropped new rules in September that flip the script for crypto platforms. Digital asset exchanges now face the same licensing requirements as banks and stockbrokers. The days of operating in regulatory limbo are over.
The proposed framework puts crypto firms under ASIC, the financial regulator that already watches over traditional finance. Public comments close October 24, after which the legislation likely heads to Parliament. With strong industry backing, passage seems probable.
This shift comes as digital currencies expand beyond trading into practical uses, including payments at online casino sites. For players on casino sites, crypto offers faster withdrawals than traditional banking, lower transaction fees, and more privacy. The new regulations aim to make these benefits safer and more reliable.
The Push Behind Stricter Oversight
Crypto theft hit record levels in early 2025. Hackers and scammers made off with more than $3.3 billion from platforms and users in just six months. Nearly 25% of stolen funds came from individual wallets. When exchanges fail or get compromised, everyday Australians absorb the losses.
Assistant Treasurer Daniel Mulino announced the draft framework with a straightforward message. Digital asset platforms and tokenized custody services will operate under the same financial services legislation that governs other intermediaries. The approach adapts existing rules to crypto rather than building a separate system from scratch.
The goal extends beyond theft prevention. Regulators want crypto treated as a legitimate financial tool, not a fringe experiment. By requiring proper licensing and oversight, the framework acknowledges that digital assets now play a real role in how people handle money.
New Requirements for Exchanges
Crypto platforms serving Australians must obtain an Australian Financial Services License. This puts them in the same category as wealth managers, brokers, and financial planners. Getting licensed means proving you have adequate capital, secure custody systems, and proper safeguards for customer funds.
Penalties for violations reach up to 10% of total annual revenue. An exchange doing $50 million in business faces potential fines of $5 million per breach. The steep costs aim to make compliance the obvious choice rather than an optional expense.
The rules mandate separation of customer and company assets. Your deposited crypto can't mix with the platform's operational funds. If the business goes under, customer holdings remain protected from creditors. This mirrors longstanding requirements for how banks treat deposits.
International operators face extra steps. Serving Australian customers requires either registering with ASIC plus opening a local office, or setting up a full Australian subsidiary. Running the business from offshore havens with minimal supervision won't cut it anymore.
How Crypto Firms Responded
Most major exchanges support the new framework, which might seem surprising. Regulation typically meets resistance. But Coinbase Australia's John O'Loghlen praised the clarity, saying defined rules help companies grow and compete effectively. Kraken's Jonathon Miller highlighted how much consultation preceded the draft, suggesting the industry helped shape reasonable requirements.
OKX Australia's Kate Cooper described the legislation as proof that crypto has graduated from niche status to mainstream finance. Her concern focuses on enforcement. Licensed platforms need protection from unlicensed competitors who undercut them by avoiding compliance costs.
The welcoming tone makes business sense. Regulatory uncertainty freezes investment decisions. When companies don't know what rules might drop next month, they hold back on hiring, product launches, and marketing. Even strict rules beat unclear rules because you can budget for known costs and plan accordingly.
This framework also fulfills promises made in Australia's March 2025 digital assets strategy. That roadmap identified licensing, custody requirements, and stablecoin oversight as priorities. The draft legislation translates those goals into concrete requirements.
Crypto Enters Retirement Accounts
An unexpected development runs parallel to tighter exchange rules. Some of Australia's superannuation funds now allow crypto allocations. The $2.8 trillion super system ranks among the world's largest retirement pools, and it operates under careful regulatory oversight.
The contrast is striking. Regulators demand stricter controls on exchanges while simultaneously approving crypto for retirement savings. Rather than contradiction, this suggests authorities view digital assets as permanent additions to the financial space, not temporary speculation.
Super funds offering crypto face their own restrictions and disclosure requirements. But their participation lends institutional credibility that pure trading platforms can't match.
The Road From Here
October 24 marks the consultation deadline. Anyone can submit feedback on the proposed rules. Treasury will review all comments before finalizing the text and sending it to Parliament. Changes are possible based on industry and consumer input.
Passage likely means a 2026 start date. Current platforms get transition time to apply for licenses and adjust their operations. ASIC needs to expand staff and build enforcement capabilities for its expanded mandate.
The framework positions Australia ahead of most Asia-Pacific neighbors on crypto regulation. Other countries either ban digital currencies outright or leave them in legal grey zones. Australia attempts a middle path that acknowledges crypto's staying power while protecting consumers from the worst risks.
Whether this balance works remains to be seen. Too much restriction could push innovation offshore. Too little leaves users vulnerable. The current draft leans toward protection, betting that legitimate crypto businesses can thrive under the same rules that govern traditional finance.
For people who trade or use crypto, expect safer platforms with stronger consumer protections. For companies, higher costs but also greater legitimacy in dealing with banks, investors, and partners. The trade shows how crypto is shifting from an alternative to the financial system into part of the system itself.
