Australia advances licensing bill for crypto platforms

TLDR

Australia is moving toward full licensing of crypto platforms as a key Senate committee backs a bill that pulls exchanges and custodians into the existing financial services regime.

1. The Senate Economics Legislation Committee has endorsed the Corporations Amendment (Digital Assets Framework) Bill 2025, which now proceeds to full parliamentary debate and votes.
2. The bill would treat most crypto platforms that hold client assets as financial services, forcing them to obtain an Australian Financial Services Licence (AFSL) and meet ASIC custody and disclosure standards.
3. Industry welcomes clarity but warns broad definitions could accidentally capture wallet and infrastructure providers, so implementation details and timelines are the critical things to watch next.

Deep Dive

1. What The Bill Actually Does

The Senate Economics Legislation Committee has recommended that Parliament pass the Corporations Amendment (Digital Assets Framework) Bill 2025, advancing it toward becoming law in Australia.

The bill would classify digital asset platforms and tokenised custody platforms as financial products under the Corporations Act and ASIC Act, bringing them into the Australian Financial Services Licence regime and aligning them with traditional finance protections.

Reports from multiple outlets describe this as a deliberate response to failures like FTX, with the goal of closing gaps around platforms that hold customer assets for trading or tokenisation.

2. Impact On Platforms And Users

If enacted, crypto exchanges and tokenised custody providers that hold customer assets will need an AFSL, comply with ASIC custody and settlement rules, and follow platform specific governance and disclosure requirements for retail clients.

Smaller operators with annual transaction volumes below 10 million Australian dollars are expected to qualify for exemptions, and some public blockchain infrastructure is explicitly outside scope, but larger platforms, including foreign ones serving Australians, would face full licensing.

Compared with todays AUSTRAC focused registration, this adds a clearer conduct and investor protection layer, including segregation and oversight of client funds and stronger rules for handling failures and disclosures.

3. Concerns And What To Watch Next

Industry groups and legal commentators have flagged that the bills broad digital token and factual control tests could unintentionally pull in wallet software and infrastructure providers, especially multi party computation solutions that hold only one key shard.

Ripple Labs and others support using control as the regulatory hook but argue the perimeter should be refined so technology vendors that cannot move funds alone are not mislabelled as custodians.

The committee acknowledged these concerns and suggested fine tuning through future regulations rather than rewriting the bill now, so the real shape of the regime will depend on ASIC and Treasury rulemaking and any transition periods after passage.

Conclusion

Australia is on track to move from a light registration model to a full financial services style licensing regime for crypto platforms that hold customer assets. For serious exchanges and custodians, this could bring valuable regulatory certainty and institutional comfort, while weaker or offshore venues may exit or tighten access. The key variables now are how narrowly the rules are drawn around control, how demanding the custody and capital standards are, and how much time platforms get to adapt.