Australia eyes A$14 million capital rule as crypto regulatory crackdown deepens
The proposed A$200,000 custody floor comes with asset and revenue tests and requirements for the outside custodian. Read the full story on CryptoSlateUnderstand the crypto stories that matter and what to watch next. Get The Catalyst in your inbox
Australia's securities regulator proposed tougher operating standards for cryptocurrency exchanges and custodians ahead of a new licensing regime next year.
The Australian Securities and Investments Commission (ASIC) released a consultation package on Oct. 15 outlining stricter requirements to protect customer assets, execute trades, manage conflicts of interest and maintain adequate financial reserves.
The proposals would bring crypto exchanges and tokenized custody platforms under safeguards comparable to those governing traditional financial institutions, expanding regulatory oversight of businesses that hold and trade digital assets on behalf of customers.
The changes implement Australia's Corporations Amendment (Digital Assets Framework) Act 2026, enacted in April and taking effect in 2027. Under the legislation, affected businesses must obtain an Australian financial services license or secure additional authorization under an existing license.
ASIC Commissioner Alan Kirkland said the framework reflects the growing integration of digital assets into mainstream finance.
“Our proposed guidance and standards acknowledge the increasing role of digital assets and tokenization, including in traditional parts of the financial system,” Kirkland said.
He added that the regulator is seeking to align Australia with comparable international jurisdictions while encouraging investment and innovation without weakening consumer protections.
The proposed changes would impose greater responsibility on exchanges for customer funds and trading activity. Platforms would need to maintain adequate records, safeguard and segregate client assets, disclose material custody risks and establish controls against market misconduct.
They would also face restrictions on trading against customers and requirements to assess tokens before listing them, potentially forcing operators to review existing trading arrangements and the assets available on their platforms.
The overhaul comes as demand for regulatory authorization rises. ASIC said it has recorded more than 140 applications for digital asset-related financial services under its existing framework, including over 110 submitted during a transitional regulatory relief period that ended in September.
One of the most consequential proposals concerns the financial resources exchanges must maintain to continue operating.
Under the first of three models outlined in Consultation Paper 392, operators that do not qualify for a third-party custody concession would need net tangible assets of at least A$14 million or 10% of average revenue, whichever is greater.