Australia Releases Strict Draft Crypto Law for Exchanges and Custody Platforms

Australia has released draft legislation that would extend financial sector laws to crypto service providers, a step framed as the foundation of the government digital asset roadmap. Assistant Treasurer ” outlined the proposal during a crypto industry conference on Thursday.

Good to Know

• The draft creates two new categories: digital asset platform and tokenized custody platform.
• Service providers would need an Australian Financial Services License under the Corporations Act.
• Regulators aim to balance consumer protection with certainty for businesses.

Until now, crypto exchanges that trade assets such as Bitcoin only needed to register with AUSTRAC. The agency lists around 400 registered platforms, though many are inactive. Under the new proposal, exchanges will require a license from the Australian Securities and Investments Commission, which currently oversees financial product providers such as derivatives platforms.

Mulino explained that licensing would apply to digital asset platforms and tokenized custody platforms, bringing them formally into the financial regulatory framework.

The draft also introduces specific rules for areas that have created risks in the past, including wrapped tokens, staking, and public token infrastructure. Service providers would face obligations tailored to the nature of digital assets, such as how they hold tokens and settle transactions.

Mulino pointed to previous failures in the sector as evidence of why new protections are needed. He said:

“Failures of digital asset businesses have highlighted the consumer risks, particularly where operators pull and hold client assets without consistent safeguard.”

According to Mulino, the draft is only an initial version. Stakeholder feedback will shape the final text before it is presented to parliament:

“This is a preliminary version of the legislation, and we are seeking stakeholder feedback on its effectiveness and clarity before proceeding further.”

For Mulino, the law is not just about tighter controls but about reshaping trust in the sector. He concluded:

“This is about legitimizing the good actors and shutting out the bad. It is about giving businesses certainty and consumers confidence.”