ASIC Updates Crypto Regulations Ahead of New Legislation

ASIC Guidance Expands to Include Tokens and Virtual Assets

The Australian Securities and Investments Commission (ASIC) has updated its guidance on digital asset regulation as new legislation moves forward, expanding definitions to include virtual assets and revised compliance criteria. This expansion seeks to enhance regulatory clarity, mandating new licensing for digital asset platforms. The updates may impact market compliance costs, potentially influencing decentralized finance and stablecoin sectors.

ASIC has expanded its digital asset guidance, covering more than just "crypto assets." This revised guidance incorporates virtual assets and tokenized products alongside traditional crypto assets. It serves as a prelude to upcoming legislation that will establish a licensing framework for exchanges and other service providers. Yield tokens, staking schemes, and asset-linked stablecoins now require licensing under this new guidance. The addition of five new case studies, raising the total to 18, outlines several scenarios where digital assets might be considered financial products.

The expanded guidance impacts various sectors in the digital market, notably custodians. All custodians must now adhere to a net asset threshold of A$10 million unless they offer ancillary services. This regulatory update extends to international platforms that target Australian users, ensuring that their geographic location cannot be used to avoid compliance with Australian law. Market reactions have been marked by concerns over increased compliance costs potentially forcing some projects offshore. There are no direct quotes from ASIC leadership, but official channels have emphasized that these updates aim to enhance regulatory clarity.

Custodians of digital assets must have a net tangible asset threshold of AUD 10 million, unless providing ancillary services.

Australian Crypto Market Could Face Compliance-Driven Changes

The expansion of ASIC's digital asset guidance is in line with global trends, reflecting similar initiatives by EU and UK regulators. These expansions often lead to shifts in the digital asset space, including potential declines in trading volume where compliance costs grow.

CoinMarketCap reports Ethereum's current price at $3,980.42. Its market cap stands at $480.43 billion, with 12.70% market dominance. Trading volume over 24 hours reached $38.72 billion, marking a 0.51% decrease. Within 24 hours, Ethereum's price fell by 3.65%, despite a 3.83% increase over 90 days.

The updated guidance will bolster the compliance framework, possibly prompting projects to reassess operating costs. Historically, regulatory shifts like these reduce local liquidity, especially if DeFi projects perceive heightened regulatory burdens. Continued evaluation of global market reactions is expected.