Australia’s financial regulator, the Australian Securities and Investments Commission (ASIC), has significantly updated its guidance on digital assets, tightening supervision as the government moves to implement comprehensive crypto licensing legislation.
The revised Info Sheet 225 aims to provide clarity on how existing financial services laws apply to digital asset businesses, preparing the industry for the upcoming Treasury Laws Amendment (Regulating Digital Asset and Tokenised Custody Platforms) Bill 2025.
📝 Key Regulatory Shifts and Terminology
- New Terminology: ASIC replaced the term "crypto assets" with the broader "digital assets," aligning with the Treasury's new proposed legislation.
- Licensing Mandate: The new bills, expected to introduce official licenses for crypto exchanges, stablecoin issuers, and custody providers by 2026, will bring these services under the existing Australian Financial Services (AFS) licence framework.
- Expanded Guidance: ASIC expanded its examples of financial products to illustrate how various digital assets (including stablecoins and tokenized securities) are categorized under the Corporations Act, helping firms determine if they require an AFS license.
🏛️ Tighter Custody Rules and Global Reach
ASIC is raising the bar on compliance, particularly for custodial services:
- Custody Standards: Companies providing custody services must now hold at least A$10 million ($6.5 million) in net tangible assets, mirroring requirements for traditional custodians.
- Offshore Compliance: The regulator explicitly warned that offshore companies serving Australian customers must also comply with the country's laws, eliminating jurisdiction as an excuse for non-compliance.
- Facilitating Transition: To smooth the transition, ASIC will recognize skilled individuals with cryptocurrency or blockchain backgrounds as responsible managers for AFS licenses, even without a traditional finance background. They also plan to grant "no-action" relief to firms genuinely working toward full authorization while maintaining strong consumer protections.
- ETP Disclosure: Fund managers and Exchange-Traded Product (ETP) issuers are subject to strict disclosure laws, requiring them to clearly inform investors of the assets held, storage locations, and specific risks associated with purchasing crypto-linked products.
ASIC also stated that it will evaluate decentralized finance (DeFi) on a project-by-project basis to determine licensing requirements, signaling a measured approach to regulating the diverse sector.
This regulatory expansion comes despite signs of stagnation in the Australian crypto market, where investor confidence has reportedly declined amid uncertainty about the new legislative environment. The government, however, believes these updates will create clear and secure laws that support innovation while safeguarding consumers.
October 2025, Cryptoniteuae