Australia Levels the Playing Field: Crypto Platforms Face Bank-Style Rules

Australia has unveiled a comprehensive regulatory framework for digital asset platforms, marking a significant shift in its approach to cryptocurrency oversight. The draft legislation, released by the Treasury on September 25, 2025, mandates that all crypto exchanges and custody services obtain an Australian Financial Services Licence (AFSL), aligning them with traditional financial institutions under the Corporations ActAustralia proposes tough crypto rules: digital asset platforms face 10% penalties^[1]. This move aims to enhance consumer protection, reduce financial crime, and establish a standardized regulatory environment for the sector. The proposal includes penalties of up to 10% of annual turnover for breaches, with a minimum fine of A$16.5 million (US$10.9 million) or three times the benefit gained from non-complianceAustralia proposes tough crypto rules: digital asset platforms face 10% penalties^[1]. Smaller platforms with less than A$5,000 per customer and A$10 million in annual transactions qualify for exemptionsAustralia proposes tough crypto rules: digital asset platforms face 10% penalties^[1].

The framework introduces two new categories—digital asset platforms and tokenised custody platforms—to address risks such as conflict of interest and custody practicesAustralia’s ASIC Proposes Regulatory Framework for Crypto Platforms^[2]. These entities will be required to adhere to the same licensing and compliance standards as traditional financial services, including secure custody, dispute resolution, and transparent settlement mechanismsAustralia proposes tough crypto rules: digital asset platforms face 10% penalties^[1]. The Australian Securities and Investments Commission (ASIC) will oversee enforcement, while AUSTRAC will focus on anti-money laundering (AML) and counter-terrorism financing (CTF) compliance. The Treasury emphasized that crypto assets are already regulated under existing frameworks but highlighted the need for stricter oversight to address emerging risksAustralia’s ASIC Proposes Regulatory Framework for Crypto Platforms^[2].

Industry stakeholders, including global exchanges like Coinbase and Kraken, have acknowledged the importance of structured regulation. Coinbase’s Australian director, John O’Loghlen, stated that regulation supports economic growth and competitiveness, while Kraken’s Jonathon Miller noted the collaborative consultation process between regulators and industry playersAustralia proposes tough crypto rules: digital asset platforms face 10% penalties^[1]. The draft also reflects lessons from recent enforcement actions, such as Binance Australia’s mandatory external audit due to AML concernsAustralia proposes tough crypto rules: digital asset platforms face 10% penalties^[1]. Regulators have stressed that the reforms will enhance investor confidence and align Australia with global standards, including the European Union’s Markets in Crypto-Assets (MiCA) regulation and China Hong Kong’s licensing requirements for stablecoinsAustralia’s ASIC Proposes Regulatory Framework for Crypto Platforms^[2].

The consultation period for the draft legislation remains open until October 24, 2025, allowing industry feedback before finalizationAustralia proposes tough crypto rules: digital asset platforms face 10% penalties^[1]. If adopted, the law will represent one of the most significant regulatory overhauls for Australia’s crypto sector, creating a licensing regime with severe penalties for non-compliance. The Treasury highlighted that the framework balances innovation with stability, ensuring digital asset platforms meet the same standards as traditional financial institutionsAustralia proposes tough crypto rules: digital asset platforms face 10% penalties^[1].

Globally, Australia’s approach mirrors trends in jurisdictions like Singapore and the EU, which integrate crypto into existing financial laws while allowing exemptions for smaller operators. The reforms also align with the OECD’s Crypto Asset Reporting Framework (CARF), which Australia plans to adopt by 2027 for tax transparencyAustralia’s Draft Crypto Regulation Legislation: What It Means for Exchanges, VASPs and the Future of Digital Assets^[4]. Analysts note that the legislation could position Australia as a competitive hub for crypto innovation in the Asia-Pacific region, provided it maintains a proportionate regulatory balance.