Australia to Exempt Low-Risk Crypto Platforms From Licensing Rules
Government Introduces Draft Digital Asset Law
Australia is moving to tighten oversight of the crypto industry, with the Albanese Government releasing draft legislation that would extend existing finance sector laws to digital asset service providers. The law, introduced by Assistant Treasurer Daniel Mulino at a crypto conference on Thursday, is described as “the cornerstone of our digital asset roadmap.”
Currently, crypto platforms need only register with AUSTRAC, the financial intelligence agency responsible for anti-money laundering oversight. Mulino said the proposed law creates two new financial product categories under the Corporations Act: a “digital asset platform” and a “tokenized custody platform.” Providers of these services would be required to hold an Australian Financial Services License (AFSL), bringing them under the direct supervision of the Australian Securities and Investments Commission (ASIC).
“This is about legitimizing the excellent actors and shutting out the poor,” Mulino told the conference. “It is about giving businesses certainty and consumers confidence.”
Investor Takeaway
Targeted Rules and Consumer secureguards
The draft law includes specific obligations covering wrapped tokens, public token infrastructure, and staking activities. platforms would need to meet new standards for custody, settlement, and handling of client assets, addressing risks highlighted by past failures in the global crypto industry. Breaches of the new framework could carry penalties of up to AU$16.5 million ($10.8 million), three times the benefit obtained, or 10% of annual turnover — whichever is greater.
Low-risk platforms are exempt: those holding less than AU$5,000 ($3,300) per customer and processing under AU$10 million ($6.6 million) annually. The Treasury said this exemption mirrors existing treatment of non-cash payment facilities, ensuring small firms are not overburdened.
Mulino emphasized that the measures respond to global lessons. “Failures of digital asset businesses have highlighted the consumer risks, particularly where operators pull and hold client assets without consistent secureguards,” he said.
Industry Welcomes Clearer Framework
Major platforms operating in Australia largely welcomed the draft rules. Swyftx CEO Jason Titman said he had expected a licensing regime and called it a necessary step. “I don’t think our industry should be frightened of high standards,” he said, adding that the balance between consumer protection and innovation looked reasonable.
OKX Australia CEO Kate Cooper stressed that enforcement would be key: “The real measure will be ensuring licensed operators aren’t undercut by unregulated players.” Crypto.com Australia’s general manager Vakul Talwar echoed this sentiment, calling the framework “long overdue” and praising its effort to protect consumers without “excessive red tape.”
Kraken Australia’s managing director Jonathon Miller welcomed the clarity for investors and institutions but warned against a “one-size-fits-all approach” that could diupsetvantage smaller innovators. Industry leaders said the proposal avoided earlier suggestions, such as requiring platforms to hold a full market operating license, which could have driven businesses offshore.
Investor Takeaway
Next Steps for Consultation
The draft law has been opened for consultation, with the Treasury accepting feedback until October 24. Mulino said the process will inform the final version of the legislation, which aims to create a long-term framework for digital assets within Australia’s financial system. If enacted, the law would bring Australia closer to jurisdictions such as the European Union, which introduced the MiCA framework, and the United States, where state-level rules like New York’s BitLicense set high compliance bars.
