Australia Unveils Draft Crypto Law: Stricter Rules for Exchanges & Custody Platforms

Government Push for Stronger Oversight

Assistant Treasurer Daniel Mulino announced the proposal at a crypto conference on Thursday, calling it “the cornerstone of our digital asset roadmap”. The draft bill aims to close regulatory gaps and provide both consumer protection and business certainty.

Currently, exchanges in Australia only need to register with AUSTRAC (Australian Transaction Reports and Analysis Centre), which has 400 registered operators, though many are inactive. Under the new plan, platforms will fall under the Australian Securities and Investments Commission (ASIC).

New Financial Products: Digital Asset & Tokenized Custody Platforms

The draft law would create two new financial product categories under the Corporations Act:

Digital Asset Platforms

Tokenized Custody Platforms

Providers offering these services would be required to hold an Australian Financial Services License (AFSL). This expands oversight beyond just derivatives and financial product providers to cover all major crypto exchanges.

The legislation also introduces rules for wrapped tokens, staking services, and public token infrastructure. Exchanges will need to meet standards for crypto custody, settlement, and client asset protection.

Penalties and Exemptions

Breaches of the rules could lead to penalties of up to AUD 16.5 million ($10.8 million), three times the benefit obtained, or 10% of annual turnover — whichever is greater.

However, “low-risk” platforms handling less than AUD 5,000 ($3,300) per customer or under AUD 10 million ($6.6 million) annually will be exempt. The Treasury said this aligns with how other financial products, such as non-cash payment facilities, are treated.

Importantly, the bill does not impose new rules on crypto issuers or non-financial blockchain projects.

Industry Response: Broad Support

Australia’s crypto industry has welcomed the draft law, with leaders praising its balance between regulation and innovation.

Swyftx CEO Jason Titman: “I don’t think our industry should be frightened of high standards… The government seems to be balancing consumer protections and innovation sensibly.”
OKX Australia CEO Kate Cooper: “The real measure will be enforcement — ensuring licensed operators aren’t undercut by unregulated players.”
Crypto.com Australia GM Vakul Talwar: Called the law “long overdue,” adding that it protects consumers without driving businesses offshore.
Kraken Australia MD Jonathon Miller: Welcomed greater certainty but stressed the need to avoid a “one-size-fits-all approach that could stifle smaller innovators.”

What’s Next?

The Treasury has opened the draft for public feedback until October 24, 2025, after which the legislation will be finalized.

Mulino emphasized: “This is about legitimizing the good actors and shutting out the bad. It is about giving businesses certainty and consumers confidence.”