Australia proposes strict rules for crypto exchanges

Key points:

• The bill requires crypto platforms to have AFSL licenses.
• Fines can reach 10% of annual turnover or 16,5 million Australian dollars.
• The rules apply to storage and trading services, except for decentralized tokens.

Australia has proposed new licensing rules for digital asset platforms, including stringent measures for companies that fail to meet the requirements.

On September 24, the Ministry of Finance published a bill that will extend the Corporations Act to exchanges and custodial providers. Platforms will be required to have an Australian financial services license and comply with standards of conduct, including honesty and fairness, and the prevention of fraudulent practices.

Companies that fail to comply with these rules face a fine of 16,5 million Australian dollars ($10,9 million), three times the amount of profit received, or 10% of annual turnover, whichever is greater. Smaller operators will be exempt from payment if their transactions per customer are less than 5000 Australian dollars and their annual transactions are less than 10 million Australian dollars.

Scope of application

These rules are based on existing anti-money laundering (AML) obligations overseen by the Australian Taxation Office (AUSTRAC) and complement the tax office’s monitoring of cryptocurrency transactions for capital gains tax purposes.

The bill marks one of the government’s most important steps toward regulating the country’s crypto sector, which already includes global players such as Coinbase and Kraken. Consultations will continue until October 24, and final legislation is expected by the end of 2025, followed by a 12-month transition period.

Key requirements

The rules extend consumer protection to “digital asset entities” — custodial services and multilateral trading platforms. The exception is decentralized tokens that are not managed by intermediaries.

Key requirements include:

• segregation of client assets;
• cybersecurity measures;
• clear disclosure of risks;
• internal dispute resolution procedures.

The bill also aims to address the issue of “debanking” by working with major Australian banks to ensure crypto businesses have access to financial services.