ASIC ends no action relief for crypto

TLDR

Australia's ASIC has ended its temporary no action relief for crypto-related firms, tightening expectations that they move into full licensing or risk enforcement.

1. ASICs transitional no action position for certain crypto businesses expired at the end of September, so from October firms that need licences but are not in process lose protection.
2. Exchanges, yield products and tokenized-asset platforms that fall under existing financial product rules must now be in the Australian licensing pipeline, which could reshape which services remain available to Australians.
3. The Digital Assets Framework Act and new custody rules starting in 2027 will add a dedicated digital asset regime, so the next 18 to 24 months are a transition phase rather than the final state.

Deep Dive

1. What ASIC Just Changed

ASIC granted a temporary no action position that let eligible crypto and tokenized-asset businesses keep operating while they moved into Australias existing financial services licensing framework.

Coverage was conditional. Firms that needed an Australian Financial Services Licence (AFSL) or variation had to apply, and those needing an Australian Market Licence or clearing and settlement licence had to notify ASIC and hold pre-application meetings by a 30 September deadline.

According to detailed summaries, from 1 October firms that should be authorised but have not met those conditions can breach the law and face civil or criminal penalties, including fines of up to 10% of annual turnover, because the no action relief was never a licence or exemption, only a promise to limit enforcement while they transitioned.

2. How Crypto Firms Are Affected

ASIC guidance already treats some crypto services as regulated financial products, including certain stablecoins, wrapped tokens, staking programs, yield products and tokenized securities, depending on their legal rights and features.

Those businesses now need to either:

1. hold or obtain an AFSL,
2. secure an Australian market or clearing licence where they operate a market, or
3. fit within narrow exemptions such as low volume markets with no more than 100 transactions and total value up to 2.5 million dollars over 12 months, as described in ASICs updated low-volume instrument that runs to 2031.

In practice, larger or better funded platforms are more likely to invest in licences, while smaller or more experimental projects may restrict Australian users, close certain products or exit the market rather than meet full regulatory standards.

3. What To Watch Next

The Corporations Amendment (Digital Assets Framework) Act 2026, which takes effect in April 2027, creates specific categories for digital asset platforms and tokenized custody platforms, with ASIC as their licensing and supervisory authority.

ASIC has also signalled separate oversight of digital-asset custody from April 2027, including consultation papers and draft rules on how client assets must be safeguarded, which will matter for exchanges and custodians.

Enforcement patterns will be important signals. High-profile cases, such as court findings that certain yield products constituted investment facilities and derivatives requiring licences, show how ASIC and the courts may treat similar crypto offerings going forward.

Conclusion

Ending no action relief moves Australian crypto firms out of a temporary grace period and into a stricter comply or exit environment under existing financial laws. The coming digital asset platform and custody regimes in 2027 mean this is a staged transition rather than a single shock, but firms that ignore licensing expectations now face rising enforcement and penalty risk, while those that adapt early are better positioned to keep serving Australian users under clearer, though heavier, rules.