Australia is stepping up its oversight of digital assets, aiming to bring crypto exchanges and custody providers under the same rules as traditional financial institutions.

The government released a draft law that could reshape the country’s crypto market, signaling tighter supervision and stronger consumer protections.

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Stricter Licensing Requirements

The draft legislation requires exchanges to obtain an Australian Financial Services License (AFSL), placing them under the supervision of the Australian Securities and Investments Commission (ASIC).

Currently, only platforms trading major assets like Bitcoin are registered with AUSTRAC. Under the new rules, all digital asset operators would need formal authorization to operate.

The law outlines requirements for wrapped tokens, staking, and the broader token infrastructure. Exchanges must implement secure custody practices, proper settlement procedures, and clear disclosure protocols. Regulators could impose penalties up to AUD 16.5 million, either calculated as a share of annual revenue or the financial benefit gained from violations.

Targeted Rules and Penalties

Low-risk operators could qualify for exemptions. Firms holding under AUD 5,000 per customer and processing less than AUD 10 million annually may not need full licensing. Treasury officials said these thresholds mirror those used for other financial products, reducing the burden on smaller firms.

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Expect ongoing updates as this story evolves.

Source: Finance Magnates