Australia Aims to Lead Global Crypto with Strict New Regulations

Australia’s government has unveiled a comprehensive regulatory framework for digital asset platforms, marking a pivotal shift in aligning crypto exchanges with traditional financial institutions. The draft legislation, released on September 25, 2025, mandates that all crypto platforms operating in the country obtain an Australian Financial Services Licence (AFSL) under the Corporations Acttitle1^[1]. This move aims to address concerns over consumer protection, money laundering, and systemic risks while fostering innovation in the sector.

Under the proposed rules, non-compliant platforms face severe penalties, including fines of up to AUD 16.5 million or 10% of annual turnover, whichever is greatertitle1^[1]. These penalties apply to breaches such as misleading conduct, unfair contracts, or failure to operate “efficiently, honestly, and fairly”title1^[1]. Smaller operators—defined as those holding less than AUD 5,000 per customer or processing under AUD 10 million in annual transactions—will be exempt, mirroring existing exemptions for traditional financial productstitle1^[1]. Assistant Treasurer Daniel Mulino emphasized that the framework is designed to “legitimise the good actors and shut out the bad,” ensuring clarity for businesses and confidence for consumerstitle2^[2].

The legislation introduces two new financial product categories: (for trading and custody services) and (for safeguarding client assets). These platforms will be subject to licensing requirements, minimum capital reserves, and governance standards akin to traditional financial institutions. The Australian Securities and Investments Commission (ASIC) will oversee compliance, with a focus on preventing risks akin to the 2022 collapse of FTX. Stablecoins are also addressed, with exemptions for intermediaries distributing tokens like AUDF, issued by Forte Securities Australiatitle1^[1].

Industry reactions have been largely positive. Coinbase’s Asia-Pacific managing director, John O’Loghlen, called the bill a “meaningful step” toward building trust and growth, while CloudTech Group’s Many Jiang described it as a “defining” moment for the sectortitle1^[1]. Kraken and Swyftx praised the move for creating a level playing field and boosting investor confidence. However, concerns persist about compliance costs potentially stifling smaller innovators.

Globally, Australia’s approach aligns with regulatory trends in jurisdictions like the EU (MiCA), the UK, and Singapore, which have implemented similar frameworks. Assistant Minister for the Digital Economy Andrew Charlton stated the reforms aim to position Australia as a “world leader in digital assets,” leveraging its strategic location in the Asia-Pacific regiontitle1^[1]. The government has also proposed expanding exemptions for stablecoin intermediaries, including AUDF, to encourage innovation while maintaining safeguardstitle1^[1].

Public consultation on the draft legislation remains open until October 24, 2025, after which the government will refine the billtitle1^[1]. Final legislation is expected in 2026, with enforcement timelines yet to be specified. The Treasury has emphasized the need for proportionality, ensuring that the framework supports innovation without compromising financial stability.

The proposed rules reflect a broader global trend toward stricter crypto oversight, driven by incidents like FTX’s collapse and rising concerns about fraud and systemic risks. By embedding crypto platforms within existing financial laws, Australia aims to provide clarity for investors while maintaining a competitive edge in the digital asset space.