Australia’s Financial Regulator Flags Broader Oversight of Crypto Under Updated Guidance

Australia’s financial regulator has issued a major update to its digital-asset guidance, expanding how existing financial-services laws apply to crypto businesses as the government prepares sweeping new legislation.

The Australian Securities and Investments Commission on Tuesday published a revised version of Info Sheet 225, clarifying when digital-asset products and services are likely to be considered financial products under the Corporations Act. 

The latest update replaces earlier “crypto-asset” terminology with the broader term “digital assets,” intended to capture virtual, tokenized, and coin-based products without exclusion.

While the guidance does not create new law, ASIC said it aims to give businesses greater certainty ahead of Treasury’s planned Digital Asset Platforms and Payment Service Providers bills, which will introduce formal licensing for exchanges, custody platforms, and certain stablecoin issuers. 

The regulator also reiterated that many digital assets, including yield-bearing tokens, staking programs, and asset-referenced stablecoins, will likely require an Australian Financial Services license under current law.

The finalized guidance builds on ASIC’s December 2024 consultation, expanding from 13 to 18 worked examples and introducing new sections on custody, fund management, and transitional relief.

These range from exchange-issued tokens and gaming NFTs to yield-bearing stablecoins, wrapped tokens, and staking-as-a-service platforms. 

In each case, ASIC examines whether the asset constitutes a managed investment scheme, a derivative, or a non-cash payment facility, depending on its rights and benefits.

ASIC also reinforced that Australian law applies to offshore and decentralized structures if they are marketed or sold to local users, warning that global platforms cannot rely on geography to avoid domestic oversight. 

The regulator further detailed new custodial obligations, requiring firms holding client assets to meet net tangible asset thresholds of up to $10 million (US$6.5 million), unless their custody role is deemed incidental.

The update builds on ASIC’s September decision to grant class relief to intermediaries distributing stablecoins from licensed issuers in a move experts previously described as a pragmatic bridge while Treasury finalizes its stablecoin regime. 

That exemption allows stablecoins issued by licensed issuers to be distributed without secondary-market or clearing licenses, provided that issuers remain responsible for disclosure and compliance.

Changes ahead

The guidance arrives as the Labor government advances its own digital-asset-platform legislation, expected to introduce a formal licensing regime for exchanges and custodians later this year. 

ASIC said its framework will evolve alongside those Treasury reforms, but that entities should already be preparing to comply with existing obligations.

In a concession to market realities, the regulator outlined transitional measures allowing experienced crypto professionals to qualify as responsible managers under AFS license requirements and signaled possible no-action relief for firms actively seeking authorization.

In a notable addition, the regulator also introduced guidance for fund managers and exchange-traded product issuers offering retail exposure to digital assets, setting expectations around custody, risk management, and disclosure under Chapter 5C of the Corporations Act. 

ASIC stopped short of defining “true DeFi,” saying whether participants in decentralized-finance arrangements require licensing will depend on individual facts and roles. 

The regulator also acknowledged overlap with other agencies, including AUSTRAC, APRA, the ATO, the ACCC, and the Reserve Bank of Australia, underscoring a role it is expected to play within a broader regulatory network.