Cryptocurrency exchanges will soon be covered by the same consumer protections that apply to banks and other financial services providers, with the Albanese government on Thursday unveiling draft legislation for its digital asset regulatory regime.
Assistant Treasurer and Finance Services minister Daniel Mulino announced the long-awaited exposure draft at the Digital Economy Council of Australia’s regulatory summit on Thursday.
The Treasury Laws Amendment Bill 2025, which has received cautious early praise from the sector, proposes new requirements for digital asset platforms and tokenised custody platforms to hold an Australian financial services licence.
To do this, the government will create two new financial products within the Corporations Act, extending existing consumer protections and licensing rules, as well as more targeted obligations.
According to documents accompanying the exposure draft, the proposed framework is designed to align Australia with the European Union, United Kingdom and other leading jurisdictions.
New obligations will seek to prevent misleading and deceptive conduct and unfair contract terms, while ensuring platform providers act efficiently, honestly and fairly at all times.
Platforms that breach these obligations will be on the hook for large fines of up to the greater of $16.5 million, three times the benefit obtained or 10 per cent of annual turnover.
Smaller exchanges that hold less than $5,000 per customer – which the government deems “low risk” – will be exempt, in a move intended to help promote innovation and create a more dynamic economy.
According to the Australian Transaction and Analysis Centre, around 400 digital exchange providers are registered in Australia, but only around 10 per cent of these are licensed with the Australian Securities and Investments Commission.
One of Australia’s largest crypto exchanges, BTC Markets, welcomed the draft regulation, which it said responds to calls for a framework and “strikes a pragmatic balance between protection and progress”.
“By bringing digital asset and tokenised custody platforms under the scope of Australian Financial Services law, the government is delivering long-awaited clarity for industry participants and investors,” the exchange company said.
“Its emphasis on transparency, fair conduct and robust licensing obligations reflects global best practice and reinforces Australia’s commitment to a thriving, competitive digital economy.”
Kraken, another popular crypto trading platform with a footprint in Australia, said the draft bill will help position the country as a “credible hub for digital asset activity”, but warned of the need to avoid a one-size-fits-all approach that could stifle competition.
“We hope that this legislation strikes the right balance, both protecting consumers and keeping the sector vibrant and globally competitive,” country managing director Jonathon Miller said.
Despite three previous consultations, Dr Mulino said the exposure draft remained a preliminary version of the final legislation and that the government would consider feedback from the broader community before proceeding further.
“The final legislation will introduce a new framework for digital asset businesses in Australia. It is about legitimising the good actors and shutting out the bad, giving businesses certainty and giving consumers confidence,” he said.
The four-week consultation on the exposure draft ends on October 24.
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