Australia has unveiled a draft bill proposing new licensing rules for digital asset platforms, introducing stringent penalties for non-compliance.
Released by the Treasury on Sept. 24, the legislation would bring cryptocurrency exchanges and custody providers under the Corporations Act, according to Bloomberg. Under the proposal, platforms would need an Australian Financial Services (AFS) license and must adhere to strict conduct standards, including acting “honestly and fairly” and avoiding misleading or deceptive practices.
Non-compliant firms could face penalties of up to A$16.5 million ($10.9 million), three times any financial benefit gained from breaches, or 10% of annual turnover—whichever is higher. Smaller operators would be exempt if they hold less than A$5,000 per customer and handle under A$10 million in yearly transactions.
Proposed rules in context
The draft legislation represents one of Australia’s most significant moves to regulate its crypto sector, which already hosts global exchanges like Coinbase and Kraken. Public consultation will run until Oct. 24, with final legislation expected later in 2025, followed by a 12-month transition period.
The proposed rules would extend consumer protections to “digital asset facilities,” including custody services and multilateral trading platforms, while excluding decentralized tokens that operate without intermediaries.
Treasury stated that the framework is designed to align with international standards, citing the EU’s MiCA regulation and Singapore’s Payment Services Act. It also incorporates the OECD’s Crypto-Asset Reporting Framework to enhance tax transparency.
Key requirements under the draft bill include segregating client assets, implementing robust cybersecurity measures, providing clear risk disclosures, and maintaining internal dispute resolution procedures. The legislation also aims to tackle “debanking” by collaborating with major Australian banks to ensure crypto businesses maintain access to essential financial services.
Industry reaction and next steps
The industry has responded cautiously but positively. Coinbase Australia’s head, John O’Loghlen, welcomed the proposals, noting that clear regulation would foster growth and enhance global competitiveness. Kraken’s local general manager, Jonathon Miller, highlighted that the draft reflects an “extensive consultation period” with both government and industry stakeholders.
The proposals build on the government’s March 2025 digital assets roadmap, which emphasized licensing, custody standards, and stablecoin regulation. If enacted, the legislation would create one of the most comprehensive crypto oversight frameworks in the Asia-Pacific region.
