Australia Unveils Draft Law to Bring Crypto Exchanges Under Finance Rules

Australia is moving to tighten oversight of its cryptocurrency industry with new draft legislation that would place crypto exchanges under the same regulatory framework as traditional financial service providers. 

Assistant Treasurer Daniel Mulino outlined the plan on Thursday at a digital-asset conference, calling the proposal “the cornerstone of our digital asset roadmap,” first released by the Albanese government in March.

Two New Financial Product Categories

Under the draft law, crypto businesses would be regulated as either a “digital asset platform” or a “tokenized custody platform,” both of which would fall within the country’s Corporations Act. Any company in these categories would need to obtain an Australian Financial Services License, bringing them under the direct supervision of the Australian Securities and Investments Commission (ASIC).

Currently, exchanges that simply facilitate trading of cryptocurrencies only need to register with the AUSTRAC (Australian Transaction Reports and Analysis Centre). Around 400 exchanges are on the agency’s books, though many remain inactive. Only platforms dealing in derivatives or other financial products must now register with ASIC.

The proposal also introduces targeted rules for wrapped tokens, public token infrastructure, and staking, along with specific standards for custody of digital assets and settlement of transactions. Mulino emphasized that recent failures of crypto firms highlight the need for consistent safeguards to protect client assets. “This is about legitimizing the good actors and shutting out the bad,” he said.

Penalties and Limited Exemptions for Exchanges

Breaches of the new rules could bring significant penalties: up to 16.5 million Australian dollars ($10.8 million), three times any benefit obtained, or 10% of annual turnover—whichever is higher—according to a Treasury statement.

Smaller, low-risk platforms may avoid these requirements. Exchanges holding less than 5,000 Australian dollars ($3,300) per customer and processing under 10 million Australian dollars ($6.6 million) annually would be exempt, aligning with current treatment of non-cash payment facilities.

Importantly, the draft law does not target cryptocurrency issuers or individuals who create or use digital assets for non-financial purposes.

The Treasury has opened a public consultation period for feedback until October 24, after which the draft will be refined into final legislation. If enacted, the measures would give Australian crypto businesses clearer regulatory certainty while offering consumers stronger protection.