Australia Expands Regulatory Oversight on Digital Assets
Australia’s top financial regulator, the Australian Securities and Investments Commission (ASIC), has strengthened its oversight of the digital asset sector by broadening how existing financial laws apply to crypto-related activities. The move is part of Australia’s ongoing effort to modernize its regulatory framework in response to the rapid growth of blockchain-based products, decentralized finance (DeFi), and stablecoins.
Comprehensive Update to ASIC’s Digital Asset Guidance
ASIC released an updated version of Information Sheet 225 (INFO 225), expanding the terminology from “crypto-assets” to “digital assets” to reflect the evolving market. The guidance now includes 18 worked examples, up from 13, covering a wider variety of products and services such as staking, yield-bearing tokens, decentralized finance protocols, and asset-referenced stablecoins. By expanding these examples, ASIC aims to assist businesses determine whether their offerings fall within Australia’s financial services licensing regime.
The regulator emphasized that digital asset activities that resemble traditional financial products—such as derivatives or managed investment schemes—may trigger licensing requirements under the Corporations Act. Companies providing such services must comply with obligations related to consumer protection, disclosure, and risk management. The update also reinforces that Australian laws can apply to offshore or decentralized entities if they market their products to Australian consumers, extending ASIC’s jurisdictional reach.
Enhanced Custody and Security Expectations
One of the key aspects of the new guidance is the strengthened focus on digital asset custody. ASIC highlighted that service providers must ensure proper segregation of client assets, robust cybersecurity measures, and transparent ownership records. These measures aim to reduce the risk of mismanagement and loss, addressing concerns that have surfaced following global crypto platform failures and security breaches.
The regulator also noted that digital asset platforms should implement clear governance structures and maintain sufficient capital reserves to secureguard customer assets. This emphasis on operational integrity aligns with international regulatory trends aimed at increasing transparency and consumer trust in crypto markets.
ASIC’s expanded guidance complements ongoing policy work by the Australian Treasury, which is developing a separate regulatory regime for digital asset platforms and payment service providers. The proposed legislation will introduce licensing and custodial standards for entities offering platform, brokerage, and stablecoin-related services. Treasury’s initiative aims to create a comprehensive framework that harmonizes existing financial law with emerging digital finance activities.
Market analysts suggest the dual-track approach—enhanced ASIC oversight combined with Treasury’s forthcoming legislation—will provide greater legal clarity for businesses and investors. It may also position Australia as one of the most forward-thinking jurisdictions for digital asset regulation in the Asia-Pacific region.
As global regulators continue tightening oversight of digital assets, Australia’s measured approach viewks to strike a balance between fostering innovation and protecting investors. ASIC’s updated guidelines signal a proactive stance, ensuring that local and offshore providers adhere to Australian standards while encouraging responsible growth in the crypto ecosystem.
With clearer compliance expectations, the Australian market could view increased institutional participation and greater confidence from retail investors. The strengthened regulatory framework marks another step toward integrating digital assets into mainstream finance while secureguarding the integrity and stability of Australia’s financial system.
