ASIC proposes stricter rules for crypto exchanges

TLDR

Australias ASIC is consulting on tough new licensing, capital, custody and trading standards that will reshape how crypto exchanges operate in the country from 2027.

1. ASICs proposals implement the Digital Assets Framework Act, bringing exchanges and custodians under an Australian financial services license regime starting 8 April 2027.
2. Draft rules tighten capital, custody and trading practices, including possible multimillion dollar capital floors and limits on platforms trading against their own customers.
3. Feedback is open until 27 November 2026, after which final standards will guide which platforms stay, consolidate or exit the Australian market.

Deep Dive

1. What ASIC Is Proposing

ASIC has published Consultation Paper 392 to implement the Corporations Amendment (Digital Assets Framework) Act 2026, creating regulated categories for digital asset platforms and tokenised custody platforms.

Covered crypto businesses will need an Australian financial services (AFS) license or a variation, plus customer disclosures and platform rules, once the regime starts on 8 April 2027. Existing operators may keep running if they apply by 7 October 2027, while ASIC assesses applications, according to guidance summarized by Crypto.news.

ASIC says the approach follows same activity, same risk, same regulatory outcome, aiming to align Australia with jurisdictions such as the EU and Hong Kong while improving consumer protection.

2. Capital, Custody and Trading Impacts

The consultation outlines three alternative capital models. One prominent option would require some platforms without qualifying third party custody to hold at least A$14 million in net tangible assets or 10 percent of average revenue, whichever is higher, as detailed in Cointelegraphs coverage.

Custody proposals require clear segregation of client assets, detailed records of wallets and blockchain addresses, and quarterly reports, while allowing offshore custodians subject to extra safeguards.

Trading rules target market misconduct and conflicts of interest. ASIC is considering restrictions on exchanges trading for their own account on the same venue where they execute client orders, and on accepting incentives to favor particular tokens, alongside best execution and transparency requirements.

3. Timeline and What To Watch

Consultation is open until 27 November 2026. ASIC plans to finalize standards and guidance around March 2027, giving exchanges a short window to adjust business models before licensing starts.

Industry responses will matter. Comments from local trade groups and major exchanges are already flagging concerns about proportionality of capital rules and practical impacts of principal?trading limits, which could influence the final shape of the regime.

For users, the key signals will be which exchanges announce plans to seek AFS licenses, how they explain new custody and disclosure practices, and whether any platforms choose to exit Australia rather than comply.

Conclusion

ASICs proposal moves Australia toward treating crypto trading and custody more like traditional financial services, with higher capital, clearer custody rules and stricter trading conduct. This could improve protection for Australian customers but may also drive consolidation and change which platforms operate in the market. Watching licensing announcements, capital commitments and any revised trading models will be critical over the next eighteen months.