Australia Cracks The Whip: Crypto Exchanges Face Tough New Rules

Australia moved on Thursday to bring cryptocurrency platforms under mainstream financial rules proposing fines that could reach A$16.5 million or as much as 10% of a firm’s annual turnover for serious ￰0￱ to the Treasury’s exposure draft the plan would force exchanges and custody providers to hold an Australian Financial Services License and meet conduct standards meant to protect customers and their ￰1￱ The Crypto Rules Mean Based on reports the draft would create two new types of financial products — “digital asset platforms” and “tokenized custody platforms” — and fold them into the Corporations Act so they fall under ASIC’s ￰2￱ that hold client crypto or settle trades would have to register

follow custody rules and provide clearer disclosures to retail ￰3￱ Treasurer Daniel Mulino flagged these changes at a regulatory summit and called the reforms a way to stamp out bad actors while supporting legitimate ￰4￱ draft sets out targeted obligations for how platforms hold customer assets how they handle settlement and risk and what disclosures they must make before offering services to the ￰5￱ that already run similar systems will face rules closer to what banks and other licensed financial entities comply with ￰6￱ And Thresholds According to multiple briefings

penalties for breaches would be whichever is greater: A$16.5 million three times the gain from the breach or 10% of annual ￰7￱ combination is meant to deter deliberate or large-scale failures rather than only penalize small ￰8￱ draft also proposes a low-value exemption so very small operators would not need a full license if they hold less than A$5,000 per customer and facilitate under A$10 million in transactions each ￰9￱ “turnover” will be measured — whether it means global revenue Australia-only revenue

or something else — has not been spelled out in detail in the ￰10￱ question will be central to how painful the penalty regime becomes for multinational ￰11￱ are also rules targeted at particular activities such as staking wrapped tokens and public token ￰12￱ government says the framework aims to be flexible so regulators can adjust which services get the tighter controls if risks ￰13￱ Response And Next Steps Industry and crypto groups and global exchanges gave cautious ￰14￱ said clearer rules will help growth by removing uncertainty; others warned compliance costs could be heavy for mid-sized ￰15￱ have disclosed that the consultation period for the draft runs until 24 October 2025

after which the government will consider submissions and refine the law before tabling final ￰16￱ image Nomads Hostel chart from TradingView