TLDR
- Australia’s financial regulator has identified crypto regulation gaps as a serious risk to consumer safety.
- The Australian Securities and Investments Commission has called for urgent clarity in licensing and oversight rules.
- A new bill introduced in November proposes the first legal framework for digital asset platforms in Australia.
- The bill would require platforms holding digital currencies to obtain an Australian Financial Services license.
- Experts have warned that regulatory uncertainty leaves consumers vulnerable to deceptive practices.
- The government estimates the new framework could boost the economy by $24 billion each year.
Australia’s financial regulator has identified regulatory gaps in crypto oversight as a top concern, warning they endanger consumer safety. A new law aims to address current loopholes that fast-evolving digital platforms exploit, forcing officials to push for urgent legislative action.
ASIC Identifies Oversight Gaps as Urgent Risk
The Australian Securities and Investments Commission (ASIC) has warned of weak oversight in digital finance sectors. The agency flagged crypto platforms, payment firms, and AI companies as operating in unclear legal areas. This concern stems from increasing risks to consumers and market fairness.
ASIC Chair Joe Longo said pressure is building on the financial system due to rapid changes and differing global standards. “The pace of transformation across markets, tech, and law is putting stress on regulation,” Longo stated. ASIC’s latest report emphasized the need to protect Australians from bad advice and harmful practices.
The regulator observed that some businesses operate legally outside current rules, while others avoid regulation entirely. This inconsistency leaves people unsure of what is permitted and what is not. Therefore, ASIC is urging legislative clarity to define licensing and enforcement boundaries.
Lawmakers proposed the Corporations Amendment (Digital Assets Framework) Bill 2025 to address these issues. The bill aims to create Australia’s first legal framework for platforms holding digital currencies for users. It would require platforms to obtain an Australian Financial Services license to operate.
Officials estimate the law could add $24 billion annually to the economy. They link this to better efficiency and stronger consumer protections. This would align Australia with global crypto regulation practices.
Crypto Regulation Law Moves Forward as Pressure Builds
The government introduced the bill in November to close existing oversight gaps. The bill outlines how crypto custody services must be licensed and monitored. It also aims to reduce the legal grey areas that confuse both users and companies.
Darcy Allen from RMIT University said the bill must pass without delay. “Defining the regulatory perimeter is the most effective step right now,” Allen told reporters. He also said innovation must not be blocked as new rules take effect.
Allen urged officials to support innovation alongside regulation. He referred to ASIC’s Enhanced Regulatory Sandbox as a step toward balanced oversight. The sandbox allows businesses to test products without a license for up to 24 months.
He said this approach helps businesses grow while keeping consumers safe. Under the sandbox, firms must meet set conditions to operate. These safeguards aim to protect users from financial harm.
Industry Voices Say Clarity Is Growing, But Education Lags
James Volpe, founder of Web3 education firm uCubed, supported recent licensing improvements. “Rules have evolved rapidly, and I expect further progress through ongoing consultation,” he explained. He said current frameworks are improving though confusion still exists.
Volpe emphasized the need for better public understanding of digital technologies. “These are complex systems that require focused education,” he added. Many users remain unaware of risks in emerging platforms.
He said clarity in rules must be matched with education campaigns. That will ensure users make informed decisions when engaging with digital assets. Volpe urged more collaboration between government, industry, and educators.
Allen also warned that 2026 will be a turning point for Australia’s tech policies. He said major updates are underway for digital platforms and AI regulations.
