- ASIC opens consultation on digital asset rules, with the new framework set to take effect in April 2027.
- ASIC proposes restrictions on crypto platforms trading against customers through their own venues.
- ASIC considers A$14 million capital requirements for crypto operators without qualifying custody setups.
Australia’s financial watchdog wants to tighten the rules for crypto platforms. Its proposals would limit exchanges from trading against their own customers and add new safeguards for customer assets.
The Australian Securities and Investments Commission (ASIC) has opened a consultation ahead of a regulatory framework set to take effect in April 2027.
The proposals are part of how ASIC is rolling out the Corporations Amendment (Digital Assets Framework) Act 2026, which is a law that brings digital asset platforms and tokenized custody providers into Australia’s financial services licensing system.
ASIC published Consultation Paper 392, laying out the standards and guidance it’s considering, with feedback due November 27.
Conflicts of Interest and Tougher Custody Rules
ASIC wants to stop certain platforms that match customer orders from trading against those customers on their own venues, including through related companies. This could affect exchanges that run both a trading venue and an affiliated market-making business.
The idea is to address cases where a platform’s own business interests could clash with what’s best for its customers. That said, the rules carve out exceptions for certain models, so this isn’t a total ban on every kind of proprietary trading by every crypto firm.
Capital requirements are another major focus. ASIC is weighing three different models, one of which would require certain operators without qualifying third-party custody setups to hold at least A$14 million (approximately $9.6 million) in net tangible assets, or 10% of average revenue, whichever is greater.
These new rules could hit smaller companies much harder than bigger ones. As a result, many small firms may choose to merge or sell to larger competitors rather than deal with the rising costs of staying compliant.
The regulator is also suggesting tougher safety rules for storing user funds. Crypto exchanges would have to keep customer assets strictly separated from company money, keep clear records of all wallet addresses and account setups, and send detailed wallet reports to ASIC every three months.
Although the proposed guidelines permit storing assets overseas to align with the global nature of crypto, this introduces potential risks.
For instance, if an international parent company or affiliate goes bankrupt, it is unclear whether domestic Australian platforms would still be able to access their private keys to recover funds. Also, companies will be required to keep all related records on file for at least seven years.
Related: Australia Seeks 10-Year CFD Curbs After Traders Lose $458 Million
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