Australia’s Financial Regulator Pushes for Tougher Crypto Exchange Rules Ahead of Licensing Deadline

Australia’s financial regulator, the Australian Securities and Investments Commission (ASIC), has proposed stricter requirements for cryptocurrency exchanges and digital asset custodians to strengthen customer protection, improve trading practices and preserve the country’s financial stability.

The proposed standards outline how crypto businesses must safeguard customer assets, execute transactions and meet financial obligations under legislation scheduled to take effect next year.

ASIC announced on Thursday that it had launched a public consultation on the proposed framework. Companies covered by the rules would need to obtain regulatory authorization or update their existing licenses. The consultation period runs until November 27, with final guidance and standards expected in March 2027.

The initiative represents another step in Australia’s effort to bring digital asset businesses under a regulatory system comparable to the one governing traditional financial institutions. Parliament approved the relevant legislation in April, placing Australia among jurisdictions such as the European Union, Singapore and Hong Kong that have established dedicated regulatory frameworks for crypto-related activities.

Australia’s regulatory push follows several high-profile failures in the digital asset industry. The collapse of FTX in 2022 left approximately 30,000 Australian customers unable to access their funds. In 2019, Cryptopia, a cryptocurrency exchange based in neighboring New Zealand, also collapsed after suffering a major hack.

The new requirements are scheduled to take effect on April 8, 2027. Crypto businesses already operating in Australia will have until October 7, 2027, to submit their license applications. They will be allowed to continue operating while ASIC assesses their applications.

For Australian investors, the proposed framework is intended to provide greater clarity about how exchanges store customer holdings, process trades and manage potential conflicts of interest. Crypto companies, meanwhile, would face additional compliance responsibilities and financial standards as a condition of operating legally in the country.

ASIC Commissioner Alan Kirkland said the regulator’s approach follows the principle of “same activity, same risk, same regulatory outcome,” with the aim of aligning Australia’s rules with those used in comparable international markets.

Under the consultation paper, crypto platforms would have to meet requirements covering the segregation and protection of customer assets, transparency in trading, settlement processes and adequate financial resources. The proposed trading standards would also address market manipulation, conflicts of interest and the procedures exchanges use to execute customer orders.

ASIC said it had received more than 140 applications from businesses seeking authorization to provide financial services related to digital assets. The regulator added that payment-related stablecoins are being handled separately under Australia’s broader reforms to payment services.