New Legislation Mandates Australian Financial Services License for Crypto Platforms
Assistant Treasurer Daniel Mulino presented the Corporations Amendment (Digital Assets Framework) Bill 2025 to the House on Wednesday. This legislation will require crypto exchanges and custody providers to obtain an Australian Financial Services License, thereby subjecting them to the same legal requirements as traditional financial institutions.
Mulino stated that digital assets are significantly reshaping global finance, and it is imperative for Australia to keep pace with these developments. The government's objective is to attract investment, foster job creation, and establish the Australian financial system as a leader in innovation by implementing a robust regulatory framework.
The Treasury initiated a consultation process for the draft bill in September, which Mulino identified as a foundational element of the Albanese government's crypto roadmap released in March. While the local crypto industry largely supported the draft legislation, it also requested greater clarity and simplification during the consultation period.
Currently, companies have the ability to hold unlimited amounts of client crypto without the safeguards provided by financial laws. Mulino emphasized that the risks associated with scams or frauds, such as the FTX incident, cannot be overlooked, necessitating this regulatory response to address existing loopholes.
Scope and Requirements of the New Framework
Crypto platforms that exclusively facilitate trading are presently required to register with the Australian Transaction Reports and Analysis Centre. This registry currently lists 400 registered crypto exchanges, although a significant number remain inactive. The new bill's focus is on companies that hold crypto for their customers, rather than on the underlying technology itself. This approach allows the regulatory framework to adapt as new forms of tokenization and digital services emerge.
The bill establishes two new categories of financial products that will necessitate an AFSL: a digital asset platform and a tokenized custody platform. Both of these will be required to register with the Australian Securities and Investments Commission. Any individual or entity that advises on, deals in, or arranges for others to deal in crypto will be considered to be providing a financial service that requires a license.
Under the provisions of the bill, crypto and custody platforms will be obligated to meet ASIC's minimum standards for transactions, settlements, and the holding of customer assets. Furthermore, they must provide their clients with a comprehensive guide detailing their services, associated fees, and the inherent risks involved.
Exemptions from licensing requirements will apply to small-scale companies with a transaction volume of less than 10 million Australian dollars (approximately $6.5 million) over a 12-month period. Additionally, companies that deal or advise on platforms incidental to their primary business activities will also be exempt.
Implementation Timeline and Legislative Outlook
The bill includes an 18-month grace period for licensing requirements. This period is intended to provide businesses with adequate time to comply with the new regulations. Prime Minister Anthony Albanese's center-left Labor Party holds a majority of 94 seats in the House, which suggests that the bill is likely to be passed quickly before moving to the Senate. In the Senate, Labor may require the support of crossbench and opposition parties for the bill's passage.