Australia’s Proposed Digital Asset Platform Laws

On 25 September 2025, Treasury released the Treasury Laws Amendment Bill 2025 (The Bill or (Exposure Draft)), the first comprehensive attempt to regulate digital asset platforms (DAPs) and tokenised custody platforms (TCPs) under the Corporations Act 2001.

This is a watershed reform. For years, crypto and blockchain platforms in Australia have operated in uncertain territory, often relying on analogy or patchwork regulation. The Exposure Draft seeks to close these gaps, provide clearer licensing standards, strengthen consumer protections, and give regulators new enforcement tools. It also introduces fresh obligations, transitional periods, and exemptions that businesses will need to understand in detail.

The Bill introduces clear statutory definitions to bring custody-based and intermediary services into the perimeter of financial services law. A digital token is defined broadly as a digital object that a person can control, transfer, or use exclusively, and where that person can be identified as exercising that control.

A DAP is defined as an arrangement where an operator holds digital tokens in trust for clients. A TCP is one where a token is issued that represents rights to redeem an underlying asset also held in trust. Both structures are expressly treated as “financial products” under Chapter 7 of the Corporations Act.

By contrast, token issuers and non-financial digital asset use cases (for example, NFTs used solely for gaming or access) fall outside scope. This ensures the law is focused on custodial and transactional intermediaries where consumer risks are most acute.

Every DAP and TCP operator will be required to hold an Australian Financial Services Licence (AFSL). This aligns platforms with existing licensees but overlays additional, sector-specific duties.

The draft legislation introduces a new DAP/TCP Guide, modelled on a product disclosure statement, that must be given to clients before they use the platform. The Guide must describe custody arrangements, rights attaching to digital tokens, settlement methods, risks, and fees.

If tokens confer governance or voting rights, operators must prepare and apply a voting policy so clients understand how decisions will be made and how their rights will be exercised. Disclosure obligations also extend to the underlying assets represented by tokens, ensuring transparency equivalent to direct ownership.

The Bill also makes clear that disclosure obligations can take the form of a Financial Services Guide (FSG), Supplementary FSG, website disclosure information, or a Product Disclosure Statement (PDS), depending on the service. Notably, section 13(4A) of the Bill provides that an operator does not contravene disclosure obligations if a defective part of the FSG, Supplementary FSG, or website disclosure is expressly stated to be the responsibility of another licensee — and relates only to services to be performed by that other licensee. This aligns disclosure liability with responsibility for service delivery.

ASIC guidance, including INFO 225 (Crypto-assets), will remain relevant when preparing disclosure material, as it explains how existing product disclosure obligations apply in the digital asset context.

The Bill includes a low-value exemption: where a platform holds no more than AUD $5,000 per client and facilitates less than AUD $10 million in transactions across a 12-month period, the operator may be exempt from AFSL licensing. This carve-out is designed to reduce burdens on micro or experimental platforms, though there will be close scrutiny of whether these thresholds are too high or too low.

Other exemptions apply to token issuers, “public digital token infrastructure” such as permissionless blockchains, and certain fundraising activities conducted via platforms (with tailored disclosure adjustments). ASIC may also grant exemptions or class relief through legislative instruments. These boundaries aim to ensure proportionate regulation, though grey areas are inevitable.

The Bill provides a staggered start to allow industry adaptation. It commences 12 months after Royal Assent, followed by a 6-month grace period where AFSL obligations do not yet apply. After that, a further 12-month transition period allows operators to continue providing services while their AFSL applications are assessed. This transition can be extended by the Minister if necessary.

This approach recognises the significant compliance uplift required, but businesses will need to begin preparations immediately. The transition is not a pause, but a managed runway to implement new obligations.

Enforcement powers are aligned with mainstream financial services regulation. ASIC will be responsible for licensing, monitoring, and compliance. Breaches of obligations are civil penalty provisions, exposing operators to penalties that may include turnover-based fines, disgorgement of profits, enforceable undertakings, and court action.

The Minister is empowered to prohibit certain financial products from being traded or held on platforms where they pose systemic or consumer risks. These measures show the government’s intention to ensure real accountability, not just licensing on paper.

The reforms are motivated by the need to close regulatory gaps, strengthen consumer protection, and increase confidence in Australia’s digital asset market. By creating a clear perimeter, they also align Australia with similar developments internationally.

However, challenges remain. Compliance costs may deter smaller entrants. Thresholds could capture unintended operators or let risky ones slip through. There is overlap with existing regimes (e.g. including AML/CTF, payments law, and taxation) that may create complexity. Much will depend on ASIC’s ability to issue practical standards and to enforce them effectively in a fast-moving sector.

The consultation period runs until 24 October 2025. Businesses should urgently review whether their operations qualify as DAPs or TCPs, measure client holdings and transaction volumes against thresholds, and begin a compliance gap analysis. Early drafting of disclosure documents (e.g. FSGs, Supplementary FSGs, website disclosures, or PDSs) will be prudent, ensuring they are consistent with the Bill’s expectations and ASIC’s INFO 225 guidance.

1. Do our services fall within the definitions of a DAP or TCP?
2. Are client balances or transaction volumes above the exemption thresholds?
3. Have we prepared draft disclosure documents (FSG, Supplementary FSG, website disclosures, or PDS) that address custody, risks, fees, and rights?
4. Have we allocated responsibility for disclosures where another licensee is involved?
5. Are our custody and settlement processes aligned with the proposed asset-holding and transactional standards?
6. Do our platform rules and contracts meet the minimum enforceable requirements?
7. Do we have a voting policy in place for any governance-linked tokens?
8. What gaps exist between our current operations and AFSL obligations?
9. Have we mapped out an AFSL application and compliance build during the transition window?
10. Are we preparing a submission to Treasury before consultation closes on 24 October 2025?

It offers clarity but imposes significant new responsibilities. For businesses, the message is clear: digital asset platforms are no longer on the fringes of financial services law. Preparing early, through disclosure updates, compliance planning, and participation in consultation will be key to navigating this regulatory shift.