Who regulates? What laws have been introduced? A review of Australia's encryption regulation.

Deng Tong, Golden Finance

On November 26, 2025, Australian Treasurer Jim Chalmers and Minister for Financial Services Daniel Mulino submitted the “2025 Companies Amendment (Digital Assets Framework) Bill” to Parliament, establishing the country's first comprehensive regulatory framework for businesses holding digital assets on behalf of clients.

This article reviews the series of issues regarding cryptocurrency regulation in Australia.

1. Who regulates?

The main regulatory bodies in Australia that regulate cryptocurrency include: the Australian Securities and Investments Commission (ASIC), which is responsible for financial services; the Australian Transaction Reports and Analysis Centre (AUSTRAC), which is responsible for anti-money laundering and counter-terrorism financing; and the Reserve Bank of Australia (RBA), which is responsible for payment systems and the development of digital currency.

The regulatory framework for cryptocurrency use and trading in Australia adopts a multi-agency cooperation model. The Australian Securities and Investments Commission (ASIC) is responsible for regulating crypto financial products and services, the Australian Transaction Reports and Analysis Centre (AUSTRAC) is responsible for implementing anti-money laundering/counter-terrorism financing (AML/CTF) requirements for exchanges and service providers, and the Reserve Bank of Australia (RBA) is responsible for managing the central bank digital currency (CBDC) pilot project and payment system innovations. The licensing and registration requirements for Digital Asset Providers (DAPs) include capital requirements, the use of third-party custodians, and foreign providers may need to establish a local branch. Virtual asset providers must conduct due diligence and transaction monitoring in accordance with the Anti-Money Laundering/Counter-Terrorism Financing Amendment (scheduled to be fully implemented in March 2026).

2. Attitudes Towards Cryptocurrency

Before 2017, Australia maintained a neutral stance towards cryptocurrencies, allowing Bitcoin and other digital assets to operate in an unregulated space. Key milestones in Australia's cryptocurrency regulation include: the inclusion of cryptocurrency exchanges under the jurisdiction of anti-money laundering/anti-terrorism financing laws in 2018; and an increased focus on cryptocurrency regulation during the 2022-2023 period following the Terra Luna incident.

In addition, Australia plans to amend the Anti-Money Laundering/Counter-Terrorism Financing Act in 2024 to expand the regulatory scope over virtual asset providers. These changes reflect Australia's shift from passive to active regulation, aimed at ensuring consumer safety and maintaining financial integrity.

III. Overview of the “2025 Company Law Amendment (Digital Asset Framework) Bill”

The “2025 Company Law Amendment (Digital Asset Framework) Bill” will require cryptocurrency companies (such as exchanges and custodial service providers) to obtain an Australian Financial Services License (AFSL).

The bill amends the Corporations Act to create two new financial products: “digital asset platforms” and “tokenized custody platforms,” both of which are required to obtain an Australian Financial Services License (AFSL).

This license will be used to register these platforms with the Australian Securities and Investments Commission. Currently, only exchanges that sell “financial products” (such as derivatives) are required to register.

According to the bill, cryptocurrency and custody platforms must comply with the minimum standards set by the Australian Securities and Investments Commission (ASIC) regarding trading, settlement, and holding client assets. They must also provide clients with guidance explaining their services, fees, and risks.

The bill exempts “small” companies from licensing if their trading volume is below 10 million AUD (6.5 million USD) in 12 months, as well as those companies that trade or provide consulting services on platforms that are “not related to their main non-financial activities.”

The bill provides an 18-month grace period for licenses, which “offers relief to businesses striving to do the right thing.”

Mulino Any person who “provides advice on cryptocurrencies, conducts cryptocurrency trading, or arranges for others to conduct cryptocurrency trading” will be regarded as providing financial services that require a license. “Globally, digital assets are reshaping the financial landscape. Australia must keep pace. If we can seize this opportunity, we can attract investment, create jobs, and make our financial system a leader in the field of innovation.”

Mulino submitted the bill to the House on Wednesday. Source: YouTube

Mulino pointed out: currently a company can hold an unlimited amount of customer cryptocurrency, “without any financial legal protections,” and the risks of fraud or scams like FTX “cannot be ignored.” “This bill addresses these challenges by reducing loopholes and ensuring that similar activities face similar obligations, and it is tailored to the digital asset ecosystem.” This legislation will focus on companies that hold cryptocurrency for customers, “rather than the underlying technology itself.” “This means that as new forms of tokenization and digital services emerge, it can also continue to evolve.”

The bill is likely to pass quickly in the House of Representatives, where Prime Minister Anthony Albanese's center-left Labor Party holds a majority with 94 seats. After that, the bill will be submitted to the Senate, where the Labor Party may need the support of independent members and the opposition to get it passed.

IV. Review of Australia's Cryptocurrency Regulatory Legislation

• "Anti-Money Laundering and Counter-Terrorism Financing Act ( 'AML/CTF Act' ) Amendment

In 2017, the Senate passed an amendment that authorized AUSTRAC to regulate “digital currency exchanges” for the first time at the legislative level. This bill laid the groundwork for the regulation of cryptocurrency exchanges in 2018.

According to the bill, Bitcoin exchanges in Australia are required to register with Austrac and be listed on the “Digital Currency Exchange Register”. In addition, exchanges must develop a series of risk prevention measures, including finding solutions for anti-money laundering and counter-terrorism financing, verifying customers' identity information, reporting any suspicious activities, and reporting international transactions or transactions exceeding AUD 10,000 to Austrac. Exchanges must also retain some transaction records and customer identity information for up to 7 years.

If an exchange provides services without being registered with Austrac, it will face civil and criminal penalties. The minimum sentence for responsible persons of cryptocurrency exchanges violating this act is 2 years, along with a fine of 105,000 AUD, while the maximum sentence can be 7 years of imprisonment, a personal fine of 420,000 AUD, and a corporate fine of 2.1 million AUD.

In April 2018, the regulation came into effect. This measure marked the end of the “grey area” for cryptocurrency exchanges in Australia, as they became entities subject to the financial regulatory framework.

• “INFO 225 Cryptographic Assets: Financial Products and Services” ( published by ASIC )

In 2017, INFO 225 was first released and has been continuously updated since. INFO 225 is the earliest official guideline for the legal applicability of cryptocurrency assets and financial products. If certain cryptocurrency assets ( or tokens ) meet the characteristics of “financial products” ( such as equity certificates, rights to income, redemption rights, etc. ), they may be regulated under current financial services laws ( such as the Corporations Act 2001). This lays a legal foundation for investor protection, ICOs, tokenized assets, and more.

• “2024 Anti-Money Laundering and Counter-Terrorism Financing Amendment”

The “2024 Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill” amends the “2006 Anti-Money Laundering and Counter-Terrorism Financing Act (Anti-Money Laundering/Counter-Terrorism Financing Act)” to include other designated services in the field of virtual assets.

The newly added designated services comply with the Financial Action Task Force (FATF) requirements. FATF Recommendation 15 requires countries to implement anti-money laundering/combating the financing of terrorism regulations for five key virtual asset services:

• Exchange between virtual assets and fiat currencies.
• Exchange between one or more other forms of virtual assets.
• Represents the client in the transfer of virtual assets.
• Custody or management of virtual assets.
• Participate in and provide financial services related to the issuance and/or sale of virtual assets by the issuer.

Previously, Australia’s anti-money laundering/anti-terrorism financing mechanism only regulated transactions between virtual assets and fiat currency. This revised bill expands the regulatory scope to include four new services and ensures that the anti-money laundering/anti-terrorism financing laws keep pace with the times and effectively respond to criminal activities in this area.

The bill will take effect on March 31, 2026.

• INFO Latest revision version 225 released

On October 28, 2025, the Australian Securities and Investments Commission (ASIC) released a revised version of Info Sheet 225 on Tuesday, clarifying which digital asset products and services may be classified as financial products under the Corporations Act framework.

The latest update replaces the previous term “crypto-asset” with the broader term “digital assets” to comprehensively cover virtual assets, tokenized assets, and token-based products without omission. Although the guideline does not have the effect of new law, ASIC stated that its purpose is to provide stronger regulatory certainty for businesses before the Australian Treasury plans to introduce the “Digital Asset Platforms and Payment Service Provider Bills.” This bill will introduce a formal licensing system for cryptocurrency exchanges, custodial platforms, and specific stablecoin issuers.

In addition, ASIC reiterated that under current laws, numerous digital assets, including yield-bearing tokens, staking programs, and asset-referenced stablecoins, may require an Australian Financial Services license.

This final version of the guidelines is based on the consultation work initiated by ASIC in December 2024, expanding the practical cases from 13 to 18, and adding chapters on custody, fund management, and transitional exemptions. These practical cases cover a wide range, including exchange-issued tokens, game-related non-fungible tokens (NFTs), yield-bearing stablecoins, wrapped tokens, and staking-as-a-service platforms.