Australia Introduces First Crypto Regulation Law Requiring Licences for Exchanges

Australia has taken a major step toward regulating digital assets with the introduction of the Corporations Amendment (Digital Assets Framework) Bill 2025.

This legislation targets crypto exchanges and custody providers that hold customer assets, mandating they obtain an Australian Financial Services Licence.

The government believes the law could unlock $24 billion in annual productivity gains while ensuring client assets are properly safeguarded.

This framework will create clear rules for crypto platforms, set minimum operational standards, and reduce risks of scams or fraud, marking a significant evolution in the country’s approach to digital finance.

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Key Takeaways

1. The bill requires crypto exchanges and custody platforms holding customer assets to obtain an Australian Financial Services Licence.

2. Small-scale operators with low transaction volumes are exempt, allowing innovation without immediate licensing burdens.

3. The law strengthens protections for investors, ensuring firms act efficiently, honestly, and fairly under ASIC oversight.

What the New Law Means for Crypto Platforms

The new legislation classifies crypto businesses into two categories: digital asset platforms and tokenized custody platforms.

Digital asset platforms cover exchanges and service providers holding clients’ crypto for trading or staking, while tokenized custody platforms manage real-world assets like property or bonds represented as redeemable tokens.

Licensed operators must follow ASIC standards, including safeguarding client assets, executing trades properly, and managing liquidity responsibly.

Key Requirements for Platforms

• Hold an Australian Financial Services Licence (AFSL)

• Comply with ASIC’s custody and settlement rules

• Provide clients with clear guidance on services, risks, and fees

Operators failing to meet these standards may face multimillion-dollar penalties, highlighting the seriousness of the regulatory shift.

By enforcing these requirements, Australia aims to bring crypto into mainstream financial oversight while protecting consumers from potential fraud or operational risks.

Exemptions exist for low-risk or small-scale operators under $10 million in volume or $5,000 per customer.

This approach encourages innovation and allows smaller players to test new business models without being immediately burdened by full licensing processes.

Read Also: Global Crypto Regulation 2025: What You Must Know

Industry Response and Remaining Challenges

The introduction of the bill received cautious support from Australia’s crypto community. Industry experts have praised the move as a step toward integrating digital assets into the regulated financial system but have flagged areas requiring clarification.

Questions remain regarding how discretionary powers will be applied, compliance costs, and detailed definitions of “digital asset” and “tokenized custody.”

Industry Perspectives

• James Volpe, Web3 education director, called the bill “a significant step toward treating tokenized assets as mainstream financial products.”

• Experts caution that Australia is still catching up to other global markets that have clearer, more established crypto regulations.

• Ongoing lobbying may be necessary to refine exemptions, tax clarity, and operational definitions.

Despite these challenges, the bill represents a crucial milestone. By requiring licensing and imposing strict operational standards, Australia positions itself as a serious player in regulated digital finance while giving investors and businesses a legal framework to operate securely.

Read Also: Crypto Regulation News: Hong Kong Unlocks International Crypto Liquidity and More

Implications for Investors and Consumers

For crypto investors, the bill enhances confidence in the market. Platforms holding customer assets will now operate under clear, enforceable standards, reducing the risk of fraud and mismanagement.

Clients will benefit from greater transparency regarding how platforms manage funds, execute trades, and provide services.

Key Benefits for Investors

• Licensed platforms provide regulated custody of digital assets

• Investors gain access to standardized disclosures about fees, risks, and operations

• The framework aligns crypto services with established financial regulations, increasing trust

This law is also expected to improve market efficiency, promote innovation in tokenized assets, and attract further investment into Australia’s digital asset ecosystem.

Read Also: Australia’s RBA to Keep Interest Rate: How Will This Impact Crypto?

Conclusion

The Corporations Amendment (Digital Assets Framework) Bill 2025 marks Australia’s first comprehensive approach to regulating crypto platforms.

By requiring exchanges and custody services to hold an Australian Financial Services Licence, the law creates a safer environment for investors and sets minimum operational standards for digital asset businesses.

Exemptions for small operators ensure innovation continues while the majority of customer-facing platforms adhere to strict compliance rules.

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FAQ

What is the Corporations Amendment (Digital Assets Framework) Bill 2025?

It is Australia’s new law regulating crypto platforms, requiring exchanges and custody services to obtain an Australian Financial Services Licence.

Who needs a licence under this law?

Any digital asset or tokenized custody platform holding clients’ crypto or tokenized real-world assets must obtain an AFSL, unless exempted by size or transaction thresholds.

Are small crypto platforms affected?

Small operators under $10 million in annual volume or $5,000 per customer are exempt, allowing early-stage experiments to proceed without licensing.

What protections does the law provide for investors?

The law ensures licensed platforms safeguard client assets, follow transaction and custody standards, and provide clear guidance on services, risks, and fees.

When will the licensing requirements take effect?

There is an 18-month grace period, giving platforms time to apply for a licence and comply with ASIC regulations before full enforcement.

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