Australia Unveils Draft Crypto Law Stricter Rules for Exchanges Custody Platforms

Australia is moving forward with stricter regulations for cryptocurrency service providers, unveiling draft legislation that would bring crypto exchanges under the same framework as traditional financial institutions.Assistant Treasurer Daniel Mulino announced the proposal at a crypto conference on Thursday, calling it “the cornerstone of our digital asset roadmap”. The draft bill aims to close regulatory gaps and provide both consumer protection and business certainty.Currently, exchanges in Australia only need to register with AUSTRAC (Australian Transaction Reports and Analysis Centre), which has 400 registered operators, though many are inactive. Under the new plan, platforms will fall under the Australian Securities and Investments Commission (ASIC).The draft law would create two new financial product categories under the Corporations Act:Providers offering these services would be required to hold an Australian Financial Services License (AFSL). This expands oversight beyond just derivatives and financial product providers to cover all major crypto exchanges.The legislation also introduces rules for wrapped tokens, staking services, and public token infrastructure. Exchanges will need to meet standards for crypto custody, settlement, and client asset protection.Breaches of the rules could lead to penalties of up to AUD 16.5 million ($10.8 million), three times the benefit obtained, or 10% of annual turnover — whichever is greater.However, “low-risk” platforms handling less than AUD 5,000 ($3,300) per customer or under AUD 10 million ($6.6 million) annually will be exempt. The Treasury said this aligns with how other financial products, such as non-cash payment facilities, are treated.Importantly, the bill does not impose new rules on crypto issuers or non-financial blockchain projects.Australia’s crypto industry has welcomed the draft law, with leaders praising its balance between regulation and innovation.The Treasury has opened the draft for public feedback until October 24, 2025, after which the legislation will be finalized.Mulino emphasized: “This is about legitimizing the good actors and shutting out the bad. It is about giving businesses certainty and consumers confidence.”