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Australia Passes Crypto Law Bringing Exchanges and Custodians Into AFSL Oversight

The move shifts safeguards onto firms that hold customer assets to cut commingling and recovery risks.

Overview

  • Parliament passed the Digital Assets Framework bill on Wednesday, which now awaits royal assent before taking effect.
  • The measure folds crypto exchanges and tokenized custody providers into the Australian Financial Services Licence regime under ASIC supervision.
  • Lawmakers created two buckets to define coverage: Digital Asset Platforms for exchanges that hold crypto for users, and Tokenized Custody Platforms for firms that hold real‑world assets and issue linked tokens.
  • Licensed operators must safeguard client assets, hold minimum capital, give clear risk disclosures, join the AFCA dispute system, and face expanded ASIC standards and civil penalties for breaches.
  • Key start dates remain unresolved until after assent, with reports of six, 12, or 18‑month transition windows, and the law grants limited exemptions for very small providers below A$5,000 per customer or A$10 million in annual transactions.