Australia Introduces Bill to License Crypto Exchanges

The Treasury launched a consultation over a draft of the bill in September, which Mulino told crypto conferencegoers was “the cornerstone” of the Albanese Governments crypto roadmap released in March.

The local crypto industry largely supported the draft legislation, but many told the consultation that the bill needed further clarity and simplification.

New bill to include safeguards for crypto held for clients

Mulino told the House its currently possible for a company to hold an unlimited amount of client crypto “without any financial law safeguards,” adding the risks of scams or frauds like FTX “cannot be ignored.”

“This bill responds to those challenges by reducing loopholes and ensuring comparable activities face comparable obligations, tailored to the digital asset ecosystem,” he said.

Currently, crypto platforms that simply facilitate trading only need to register with the Australian Transaction Reports and Analysis Centre, which has 400 registered crypto exchanges, many of which are inactive.

The legislation would focus on the companies that hold crypto for customers, “rather than the underlying technology itself,” Mulino added. “This means it can evolve as new forms of tokenisation and digital services emerge.”

Crypto bill adds two new license types, exempts small players

The bill amends the Corporations Act to create two new financial products, a “digital asset platform” and a “tokenized custody platform,” both of which will need an AFSL.

The license will register the platforms with the Australian Securities and Investments Commission. Currently, only exchanges that sell “financial products,” such as derivatives, must register.

Mulino said anyone “advising on, dealing in, or arranging for others to deal in” crypto will be treated as providing a financial service that requires a license.

Under the bill, crypto and custody platforms must meet ASICs minimum standards for transactions, settlements and holding customer assets. They must also give a guide to clients explaining their service, fees and risks.

Mulino said the bill exempts “small-scale” companies from licensing, those with less than 10 million Australian dollars ($6.5 million) in transaction volume in 12 months, along with those that deal or advise on platforms “incidental to their main, non-financial activities.”

The bill outlines an 18-month grace period on licensing, which Mulino said gives “relief for businesses trying to do the right thing.”

The bill is likely to quickly pass the House, where Prime Minister Anthony Albaneses center-left Labor Party holds a 94-seat majority. It will then head to the Senate, where Labor may need the support of the crossbench and opposition to pass it.