Crypto Exchanges Face Tough New Rules

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Australia moved on Thursday to bring cryptocurrency platforms under mainstream financial rules, proposing fines that could reach A$16.5 million or as much as 10% of a firm’s annual turnover for serious breaches.

According to the Treasury’s exposure draft, the plan would force exchanges and custody providers to hold an Australian Financial Services License and meet conduct standards meant to protect customers and their assets.

What The Crypto Rules Mean

Based on reports, the draft would create two new types of financial products — “digital asset platforms” and “tokenized custody platforms” — and fold them into the Corporations Act so they fall under ASIC’s oversight.

Platforms that hold client crypto or settle trades would have to register, follow custody rules, and provide clearer disclosures to retail users.

Assistant Treasurer Daniel Mulino flagged these changes at a regulatory summit and called the reforms a way to stamp out bad actors while supporting legitimate firms.

The draft sets out targeted obligations for how platforms hold customer assets, how they handle settlement and risk, and what disclosures they must make before offering services to the public.

Companies that already run similar systems will face rules closer to what banks and other licensed financial entities comply with today.

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Penalties And Thresholds

According to multiple briefings, penalties for breaches would be whichever is greater: A$16.5 million, three times the gain from the breach, or 10% of annual turnover.

That combination is meant to deter deliberate or large-scale failures rather than only penalize small mistakes. The draft also proposes a low-value exemption so very small operators would not need a full license if they hold less than A$5,000 per customer and facilitate under A$10 million in transactions each year.

How “turnover” will be measured — whether it means global revenue, Australia-only revenue, or something else — has not been spelled out in detail in the draft. That question will be central to how painful the penalty regime becomes for multinational exchanges.

There are also rules targeted at particular activities, such as staking, wrapped tokens and public token infrastructure. The government says the framework aims to be flexible so regulators can adjust which services get the tighter controls if risks change.

Source: Cheng Xin / Getty Images

Industry Response And Next Steps

Industry and crypto groups and global exchanges gave cautious responses. Some said clearer rules will help growth by removing uncertainty; others warned compliance costs could be heavy for mid-sized players.

Reports have disclosed that the consultation period for the draft runs until 24 October 2025, after which the government will consider submissions and refine the law before tabling final legislation.

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