Australia Enacts Crypto Licensing Law, Bringing Digital Asset Platforms Under Financial Services Rules

Australia has approved a new law that will require many crypto businesses to obtain a financial services licence, one of the country's most direct steps yet to fold digital assets into mainstream regulation. The Corporations Amendment (Digital Assets Framework) Bill 2025 has passed both chambers of Parliament and establishes a licensing regime for firms that hold digital assets on behalf of consumers. Under the framework, operators classified as digital asset platforms or tokenised custody platforms must hold an Australian Financial Services Licence (AFSL). The measure adds supervision to an industry that already faces anti-money laundering and know-your-customer obligations, and it anchors digital asset activity within Australia's existing financial system rather than creating a standalone crypto rulebook. Licensing targets custody and consumer safeguards Treasury said the reforms are aimed at businesses holding customer crypto, addressing a gap that had allowed some firms to custody unlimited client assets without equivalent protections under financial services law. Licensed platforms will be required to meet a set of conduct and operational standards, including acting efficiently, honestly and fairly; maintaining governance and risk controls; providing clear information on how assets are stored; and offering dispute resolution and compensation arrangements. A carve-out applies to smaller operators. Based on the government's outline, platforms holding less than A$5,000 per customer and processing under A$10 million in annual transactions will be exempt from the licensing requirement. Layered on top of existing AML compliance The new framework does not replace Australia's existing anti-money laundering regime. It sits alongside AUSTRAC requirements that already apply to certain digital asset services and are set to expand further from July 1, 2026. As a result, many firms may need to manage two compliance tracks: AUSTRAC obligations for services such as crypto exchange, custody and transfers, and, where they fall within the new categories, AFSL obligations under the Corporations Act. Officials said the legislation is part of a broader effort to replace fragmented oversight with a clearer legal structure, supporting innovation while strengthening consumer protections in the wake of major global crypto failures. Market participants are expected to focus next on the final assent process, transition timelines and detailed guidance on how the rules will be applied in practice.