Australia’s financial watchdog, the Australian Securities and Investments Commission (ASIC), is proposing stricter regulations for cryptocurrency exchanges and digital asset custodians to improve the protection of customer funds, strengthen trading standards and support the country’s financial stability.
The proposed framework sets out requirements for crypto businesses regarding the storage and protection of customer assets, trade execution and financial resources under legislation due to take effect next year.
ASIC announced on Thursday that it had begun consulting the public on the proposed rules. Businesses covered by the framework would need to secure regulatory approval or revise their existing licenses to meet the new requirements. The consultation will remain open until November 27, while the regulator expects to publish its final guidance and standards in March 2027.
The proposals form part of Australia’s broader effort to bring cryptocurrency companies under regulatory arrangements similar to those governing traditional financial institutions. The country’s parliament passed the legislation in April, following the lead of jurisdictions such as the European Union, Singapore and Hong Kong, which have introduced specific rules for the digital asset sector.
The push for tighter oversight follows previous failures that exposed risks for Australian crypto investors. The 2022 collapse of FTX left around 30,000 Australian customers unable to withdraw their funds. In 2019, New Zealand-based exchange Cryptopia also went bankrupt following a major security breach.
The new rules are scheduled to come into force on April 8, 2027. Existing crypto businesses will have until October 7, 2027, to apply for the necessary licenses. They can continue operating during the transition period while ASIC reviews their applications.
For investors, the changes are expected to establish clearer standards for how exchanges hold customer assets, process transactions and address conflicts of interest. Companies operating in the sector will need to meet additional compliance obligations and financial requirements to continue providing services legally in Australia.
ASIC Commissioner Alan Kirkland said the regulator was following a principle of “same activity, same risk, same regulatory outcome.” The approach is intended to ensure Australia’s regulatory framework remains consistent with standards adopted by comparable international jurisdictions.
The consultation document outlines proposed obligations for crypto platforms covering customer asset segregation and protection, trading transparency, settlement procedures and minimum financial resources. It also addresses safeguards against market manipulation, the management of conflicts of interest and the way platforms process customer orders.
ASIC reported receiving more than 140 applications from businesses seeking authorization to offer financial services connected to digital assets. The regulator also clarified that stablecoins used for payments are being addressed separately through Australia’s ongoing payment services reforms.
