Australia moves forward with bill to regulate crypto under finance laws

Australia's government has introduced legislation that will bring cryptocurrency platforms under the country's existing financial services regulatory framework, marking a significant step toward formal oversight of the digital asset sector. The Corporations Amendment (Digital Assets Framework) Bill 2025, introduced by Assistant Treasurer Daniel Mulino, would require crypto exchanges and custody providers to obtain Australian Financial Services Licenses (AFSL), subjecting them to the same regulatory standards as traditional financial institutions.

Background and Context

The move follows extensive industry consultation that began in September 2024, when the Treasury released a draft version of the legislation for public comment. The bill represents what Mulino has described as "the cornerstone" of the Albanese Government's crypto roadmap, initially unveiled in March 2024. Currently, crypto platforms that merely facilitate trading need only register with the Australian Transaction Reports and Analysis Centre (AUSTRAC), which maintains 400 registered crypto exchanges—many of which remain inactive. This regulatory gap has left significant protections absent for consumers holding digital assets on these platforms.

Key Figures and Entities

Assistant Treasurer Daniel Mulino, who introduced the bill to the House of Representatives, has emphasized the necessity of regulatory modernization. "Across the world, digital assets are reshaping finance," Mulino told Parliament. "Australia must keep pace. If we get this right, we can attract investment, create jobs and position our financial system as a leader in innovation." The legislation targets companies that hold crypto for customers rather than the underlying technology itself, allowing the framework to adapt to emerging forms of tokenization and digital services. Under the proposed rules, the Australian Securities and Investments Commission (ASIC) would become the primary regulator for licensed crypto platforms.

Legal and Financial Mechanisms

The bill amends the Corporations Act to establish two new financial product categories: "digital asset platforms" and "tokenized custody platforms," both requiring AFSL registration. These platforms must meet ASIC's minimum standards for transactions, settlements, and customer asset protection. Additionally, license holders must provide clients with comprehensive guides detailing their services, fee structures, and associated risks. The legislation includes an exemption for "small-scale" companies handling less than AU$10 million (approximately $6.5 million) in transaction volume annually, as well as businesses dealing in crypto only incidentally to their primary non-financial activities. An 18-month grace period for licensing compliance aims to provide transition relief for existing operators.

International Implications and Policy Response

Mulino specifically referenced the collapse of FTX as demonstrating why regulatory safeguards cannot be ignored, noting that companies can currently hold "unlimited amounts of client crypto without any financial law safeguards." The Australian approach follows a global trend of bringing digital asset activities within traditional financial regulatory frameworks, rather than creating entirely new regulatory systems. The bill's passage through Parliament appears likely, with Prime Minister Anthony Albanese's center-left Labor Party holding a 94-seat majority in the House of Representatives. However, the legislation may require negotiation in the Senate, where Labor will need support from crossbench and opposition members to secure passage.

Sources

This report draws on parliamentary proceedings from the Australian House of Representatives, public consultation documents released by the Australian Treasury, and statements from Assistant Treasurer Daniel Mulino regarding the Corporations Amendment (Digital Assets Framework) Bill 2025.