Australia Passes Crypto Regulations Requiring Exchanges to Obtain Financial Services Licenses
Australia has enacted its first comprehensive regulatory framework for digital assets, passing the Corporations Amendment (Digital Asset Framework) Act 2025 on April 1. The legislation requires cryptocurrency exchanges and custody platforms to obtain Australian Financial Services Licenses (AFSL) within a six-month transition period, bringing the industry under the same regulatory umbrella as traditional brokers and fund managers .
The new law creates two distinct regulated categories under the Corporations Act. Digital asset platforms—entities that hold cryptocurrencies on behalf of users—must now comply with the same client asset protection, disclosure, conduct, and dispute resolution requirements that apply to traditional financial intermediaries. Similarly, tokenized custody platforms, which hold real-world assets and issue corresponding digital tokens, fall under the same licensing regime .
Both categories must obtain an AFSL from the Australian Securities and Investments Commission (ASIC). The framework does not regulate crypto assets themselves but instead targets the intermediary businesses that control customer funds. This approach aims to address the risks that have surfaced in past crypto failures, including commingling of client assets, insolvency mismanagement, and misuse of funds .
Policymakers have framed the legislation as a gateway to significant economic opportunity. Research from the Digital Finance Cooperative Research Center and industry groups estimates that Australia could generate as much as A$24 billion annually from tokenized markets, payments, and digital assets—roughly 1% of the country’s GDP. Under previous regulatory uncertainty, the country was projected to capture only about A$1 billion of that opportunity by 2030 .
Industry reaction has been broadly positive. A spokesperson for Kraken described the law as a “top-down signal” that Australia is serious about digital assets, adding that clearer rules would give firms the confidence to invest and expand locally. Kate Cooper, CEO of OKX Australia and co-chair of the Digital Economy Council of Australia, called the bill a “pivotal moment,” noting that it establishes a foundation for institutional participation and long-term capital allocation .
The licensing regime introduces core requirements that mirror those of traditional financial services: safeguarding client assets, providing standardized disclosures, avoiding misleading conduct, and maintaining dispute resolution and compensation systems. These protections are designed to reduce risks such as commingling and misuse of customer assets that have caused losses in previous crypto failures .
The six-month implementation timeline gives existing operators a window to align their operations with the new requirements. Firms that fail to obtain the necessary licenses after the transition period will be prohibited from offering custody or exchange services to Australian customers .
The legislation arrives as other major jurisdictions, including Hong Kong and the European Union, also advance their own digital asset regulatory frameworks. Australia’s approach, which focuses on intermediaries rather than the underlying assets, aligns with broader international trends toward regulating the points where customers interact with digital asset markets .
For investors, the new framework offers greater certainty about the protections that apply to their holdings. The requirement that licensed platforms segregate client assets, provide transparent disclosures, and maintain compensation mechanisms addresses gaps that have left users vulnerable in past exchange collapses .
As the six-month countdown begins, crypto exchanges and custody providers operating in Australia will need to assess their readiness for the new licensing regime. The law marks a significant shift from the regulatory uncertainty that has characterized the Australian crypto landscape, positioning the country as one of the first major economies to implement a comprehensive licensing framework for digital asset intermediaries .
