Australia Opens Consultation on Crypto Platform Rules Ahead of 2027 Implementation

ASIC Launches Public Consultation on Crypto Regulations

Australia’s securities regulator, ASIC, has opened a consultation on proposed capital, custody, and trading rules for crypto platforms. This is part of preparations to implement new legislation passed in April, expanding regulatory oversight of the crypto industry.

The proposals include three different capital requirement models, limitations on platforms trading for their own accounts, and mandatory quarterly reporting on wallets holding customer assets. Provisions also allow for offshore custody, with safeguards if a foreign parent company fails.

ASIC Commissioner Alan Kirkland stated the guidance acknowledges the growing importance of digital assets and tokenization within traditional finance.

Amy-Rose Goodey, CEO of the Digital Economy Council of Australia, called the consultation a key milestone indicating a shift from regulatory discussion towards practical application. OKX Australia CEO Shane Chandra welcomed the proposals, noting they would encourage industry consolidation by challenging operators who have yet to invest in compliance and capital requirements.

Details on Capital, Custody, and Trading Rules

ASIC is considering three capital models, including one that requires operators without qualifying third-party custody to hold either 14 million Australian dollars (about 9.7 million USD) in net tangible assets or 10% of average revenue, whichever is higher.

Goodey stressed that the council will thoroughly assess the proportionality of these models for businesses of varying sizes and look at concessions related to third-party custody.

Steven Pettigrove, partner at Piper Alderman, noted that these financial requirements favor larger operators and established custodians.

The regulator also proposes allowing offshore custody but seeks input on whether Australian operators should have emergency access to private keys if their overseas parent or related company fails — essential given the globalized nature of digital asset markets, according to partner Liam Hennessy of Thomsons.

Trading Restrictions and Reporting Requirements

ASIC intends to prohibit platforms from trading on their own accounts and from receiving benefits that could create conflicts of interest in favoring particular tokens.

Hennessy pointed out that this may challenge existing trading models, especially those where an order-matching platform also acts as principal or uses affiliated market makers, with some model-specific exceptions.

Operators would be required to report custody wallet structures and addresses to ASIC on a quarterly basis and retain records for seven years.

Hennessy also explained that much of the Australian market depends on offshore infrastructure, as digital assets are frequently held offshore due to international competition.

Implementation Timeline and Next Steps

The consultation period runs until November 27. ASIC aims to publish final rules and guidance by March 2027.

The new Digital Assets Framework Act will take effect on April 8, 2027. Operators have until October 7, 2027, to apply for licenses and may continue to operate while ASIC processes applications, ensuring a smooth transition to the new regulatory regime.