Australia’s crypto sector has broadly welcomed the government’s draft legislation unveiled last month, though many in the industry are urging the Treasury to provide greater clarity in key areas.
“The draft legislation, as it stands, leaves some critical questions unanswered,” said Caroline Bowler, former CEO of crypto exchange BTC Markets, in a statement.
“We support the government’s intent to bring structure to the digital asset sector. But structure must come with clarity.”
On Friday, Australia’s Treasury wrapped up its consultation — launched in late September — on draft regulations that would extend existing financial sector laws to cover crypto exchanges.
The draft legislation would introduce two new categories of financial products under Australia’s Corporations Act — a “digital asset platform” and a “tokenized custody platform.” Both would require an Australian Financial Services License (AFSL) and registration with the Australian Securities and Investments Commission (ASIC).
Draft law needs refinement, says Swyftx
In its submission to the Treasury, crypto exchange Swyftx said the proposed legislation needs “simplifying and clarifying,” particularly regarding the scope of government powers and how exchanges will be allowed to operate.
The company warned that the draft currently gives the Treasury “a high degree of discretion,” enabling regulators to “impose fundamental changes” without clear guardrails. Swyftx recommended that the bill include a formal statement “to guide future regulatory interpretation” and clearly define the respective powers of the Treasury and ASIC in designating platforms and setting minimum standards.
Mandy Jiang, executive director and financial chief at blockchain firm CloudTech Group, called the draft laws a “significant step forward” but noted that they leave “many critical details,” such as licensing and custody standards, to future ASIC guidance.
“Whether this legislation meets its goals of fostering innovation and supporting sector growth and competition will depend largely on the timeliness and quality of ASIC’s forthcoming guidance,” she said.
Industry flags regulatory gaps
Swyftx also argued that the draft laws fail to clarify how Australian crypto platforms can legally source liquidity from offshore exchanges, a factor it considers essential for maintaining “a level playing field with international markets.”
The company further raised concerns that the legislation bars licensed financial advisers from directly advising on cryptocurrencies — allowing them only to advise on regulated platforms that offer crypto exposure.
Swyftx CEO Jason Titman told Cointelegraph that while the exchange supports bringing crypto under financial services regulation, its “main concerns right now are ensuring Australian consumers are properly protected and that the local industry can compete on fair terms.”
Caroline Bowler, former CEO of BTC Markets, added that the draft legislation still lacks clarity on key definitions.
“It’s unclear how a cryptocurrency can be determined not to be a financial product — or how a platform can be treated as a financial market when it doesn’t trade financial products. That’s a contradiction that needs resolution,” she said.
Bowler also criticized the introduction of multiple new licenses “without clearly articulating the consumer benefit or the specific risks it seeks to address.”
“Regulation should be proportionate and fit for purpose. Without that, we risk building a regime that is burdensome for businesses but does not necessarily enhance consumer protection.”
Legislation expected by early 2026
Vakul Talwar, Crypto.com’s general manager for Australia, urged the Albanese government not to “take their foot off the throttle” and to move quickly to amend and introduce the bill — potentially as early as March 2026.
Talwar said he expects the bill to progress smoothly through Parliament, noting that “it seems as though this will largely have bipartisan support.”
“We’d like to see legislation finalized as soon as possible — in our view, this absolutely needs to happen by the end of 2026,” he added.
However, Edward Carroll, head of global markets at MHC Digital Group, offered a more cautious outlook.
“The reality is that we probably won’t see legislation introduced before the end of 2026,” Carroll said. “There’s still significant work to be done translating consultation feedback into a practical bill — but the sooner the rules are finalized, the sooner businesses can plan with confidence.”
