Australian Cryptocurrency Regulations Update Tighter Rules For Crypto Exchanges

Australia has released a very comprehensive draft law for tighter oversight of crypto exchanges. The law aims to ensure that all digital asset platforms are subject to financial services regulations and, hence, must obtain an Australian Financial Services License (AFSL). Through this, the government aims to ensure consumer protection, provide regulatory certainty, and foster responsible innovation within an evolving and dynamic cryptocurrency market. The proposed draft legislation provides two additional categories of financial products: digital asset platforms and tokenised custody platforms. If these are passed, it means that any provider offering trading, staking, or custody services for digital assets would have to comply with AFSL requirements.Presently, only exchanges concerned with derivatives are forced to register with ASIC, whilst regular crypto platforms enjoy a fair degree of free rein. Other instruments otherwise within the bill’s purview could include wrapped tokens, public token infrastructure, and other novel forms of digital assets. Regulators emphasise that these measures are to legalise responsible operators, prevent misuse of client funds, and increase transparency across the sector. In clearly demarcating the reach of regulation, it is hoped that the government will build confidence amongst investors and ensure that businesses enjoy certainty at law.While the draft law expands on oversight, it prescribes more exemptions towards smaller or low-risk operators. Platforms that maintain an account of less than AUD 5,000 per user would be exempted from the AFSL requirement.

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