Australia to Require AFSL for Crypto Exchanges and Custodians — 18‑Month Transition
Australia’s government has advanced the Corporations Amendment (Digital Assets Framework) Bill 2025, which will bring crypto exchanges, custodians and other firms that hold or arrange client digital assets under existing financial‑services law. Presented by Assistant Treasurer Daniel Mulino, the bill treats advising, dealing in, or arranging crypto transactions as providing financial services and requires affected platforms to hold an Australian Financial Services Licence (AFSL) and register with ASIC. New categories — “digital asset platforms” and “tokenised custody platforms” — codify custodial responsibilities and require platforms to meet ASIC’s minimum standards for trading, settlement and client asset custody, plus clearer client disclosures on services, fees and risks. Exemptions apply to entities with under A$10 million in annual transaction volume and to firms whose crypto dealings are incidental; an 18‑month licensing grace period aims to ease compliance for existing operators. The bill is expected to pass the House under Labor’s majority and move to the Senate for further scrutiny. Key trader takeaways: expect stronger consumer protections and operational standards, higher compliance costs for platforms that may drive consolidation, potential short‑term liquidity impacts as smaller operators exit or restructure, and improved legal clarity for custodial services that could support institutional participation. Primary keywords: Australia crypto regulation, AFSL, crypto exchanges. Secondary keywords: ASIC registration, custodial platforms, 18‑month transition.
Neutral
The bill creates regulatory clarity by requiring AFSLs and ASIC registration for exchanges and custodians. In the short term this is likely neutral-to-mildly negative for token prices because higher compliance costs and an 18‑month licensing window may force small platforms to consolidate or exit, temporarily reducing liquidity and trading options. Traders could see increased operational friction (withdrawal limits, delistings or tighter KYC) as platforms implement controls. However, in the medium to long term the law is likely neutral-to-positive: clearer custody rules and standards can attract institutional capital and reduce counterparty risk, supporting healthier market structure and potentially higher confidence in Australian-listed or Australia‑hosted crypto services. Overall, the immediate price impact should be limited and market reaction will depend on how quickly major platforms adapt and whether any major exchange exits occur during the transition.