Australia is cracking down on cryptocurrency exchanges and custody platforms with legislation that the government says could unlock $24 billion a year in productivity gains while imposing millions of dollars in fines on companies that fail to protect customer assets.
Legal Entity Amendment (Digital Asset Framework) 2025 BillThe legislation, introduced by Finance Minister Jim Chalmers and Financial Services Minister Daniel Mulino on Wednesday, establishes Australia’s first comprehensive regulatory framework for companies that hold digital assets on behalf of their customers.
The bill was introduced and had its first reading on Wednesday, and its second reading the same day. This is a procedural step in which Parliament debates the general principles of a bill before considering it in detail.
“We take Australia’s crypto industry seriously and know that blockchain and digital assets present significant opportunities for our economy, financial sector and businesses,” officials said in a written statement. statement.
James Volpe, founding director of Melbourne-based Web3 education company uCubed, said: decryption He said the bill is an “early-stage experiment that does not force any proof of concept into the licensing process from day one.”
fill a dangerous gap
The Bill introduces two new categories of financial instruments under the Companies Act.
Digital asset platforms include facilities where operators hold customers’ crypto assets and provide transaction functionality such as transfer, purchase, sale, and staking.
Tokenized custody platforms, on the other hand, handle real-world assets such as bonds, real estate, and commodities. There, a licensed operator must hold each underlying asset and issue a single redeemable token that clients can redeem in their original form.
Platforms must hold an Australian financial services license, act “efficiently, honestly and fairly” and follow ASIC custody and settlement standards, which govern how assets are protected, transactions are executed, customer instructions are processed and liquidity is sourced.
Low-risk operators with less than $5,000 per customer and a volume threshold of less than $10 million are exempt from full licensing.
Volpe noted that the exemption for “truly small, low-risk platforms” allows early-stage experiments to move forward without requiring all prototypes to be fully licensed.
The bill follows ASIC’s October Update to information sheet 225added new guidance on tokens and custody, fund management, and yield products using tokens. stable coin Under current law, it is likely to be treated as a financial product.
New rules, old gaps
Darcy Allen, associate professor at RMIT University and director of the Australian Digital Economy Council, said: decryption It said the industry still had “genuine questions about how these changes will work in practice”, including how discretionary powers will be used and what compliance costs will be for Australian businesses.
“The real issue is that, after years of delays, Australia must now recognize that it is a follower in digital asset regulation,” Allen said, noting that other markets are already moving ahead with introducing clearer and more established regimes.
Sharing similar concerns, Joni Pirovich, founder and CEO of cryptocurrency specialist master agency The Crystal aOS, said: decryption While this bill is a step in the right direction, significant gaps remain and the industry will need to fight to fix them.
“Definition details” are not where they need to be, he said, adding that the industry now needs to lobby major political parties and non-partisan groups for more comprehensive reforms that also provide tax clarity.
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