Australia is moving to tighten its oversight of digital asset platforms, unveiling draft legislation that could impose penalties as high as 10% of a company’s annual turnover for rule breaches.
Under the proposal, crypto exchanges and service providers will need to hold an Australian Financial Services Licence (AFSL). Companies found guilty of dishonest or unfair conduct, misleading practices, or using unfair contract terms could face fines of the greater of three amounts: A$16.5 million (US$10.9 million), three times the benefit obtained, or 10% of their annual revenue.
The draft framework builds on existing anti-money laundering requirements enforced by AUSTRAC and complements the Australian Taxation Office’s monitoring of crypto transactions for capital gains tax purposes. Earlier this year, AUSTRAC instructed Binance’s Australian branch to undergo an external audit due to money laundering concerns.
Consultation Period
The government will accept industry feedback until October 24, after which the framework may head toward parliament. This marks one of the most ambitious regulatory pushes in Australia’s crypto sector, affecting large platforms such as Coinbase and Kraken.
The Australian Securities and Investments Commission (ASIC), central bank, and other regulators have repeatedly warned about the risks to retail investors as crypto adoption surges.
Scope of the Rules
The new system extends the Corporations Act to cover digital asset and custody providers, embedding stronger consumer protections and licensing obligations. However, smaller players will see lighter requirements: businesses holding less than A$5,000 per customer and handling under A$10 million in annual transactions will be exempt.
Balancing Oversight and Innovation
Officials say the aim is to shield consumers without stifling innovation. Recent regulatory moves, such as ASIC’s decision to grant temporary relief for stablecoin distributors until June 2028, suggest authorities are also exploring flexible approaches where financial safeguards already exist.
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