TL;DR
- ASIC has proposed new capital, custody, and trading requirements for crypto exchanges and digital asset service providers in Australia.
- One of the proposed models would require certain platforms without qualifying third-party custody arrangements to hold at least 14 million Australian dollars in capital.
- The legislation will take effect on April 8, 2027, and companies will have until October 7 of that year to apply for their licenses.
The Australian Securities and Investments Commission (ASIC) has unveiled a series of regulatory proposals that would impose stricter requirements on cryptocurrency exchanges and digital asset custody providers.
The measures aim to strengthen customer fund protection, improve trading transparency, and establish financial obligations for platforms operating in Australia.
The public consultation will remain open until November 27, with ASIC planning to publish its final standards in March 2027.
ASIC Proposes Stricter Capital and Custody Requirements
The regulator has outlined three alternative capital models. Under one proposal, certain platforms without qualifying third-party custody arrangements would be required to maintain at least 14 million Australian dollars (approximately $9.7 million) in net tangible assets, or 10% of their average revenue, whichever is greater.
ASIC also proposes allowing cryptocurrency custody overseas, while considering safeguards to protect customer funds if a foreign parent company or related entity experiences financial difficulties.
Platforms would have to report the addresses and structures of their custody wallets quarterly and retain the relevant records for seven years.
New Restrictions on Exchange Trading Activities
The proposals include restrictions on proprietary trading by certain platforms and on accepting incentives to favor specific tokens.
These restrictions aim to reduce conflicts of interest and market manipulation risks, particularly when an exchange trades directly on the platform where it executes customer orders.
ASIC Commissioner Alan Kirkland explained that the regulatory approach follows the principle of applying the same rules to activities that carry equivalent risks.
The legislation passed by Australia’s Parliament in April will take effect on April 8, 2027.
Companies already operating in the country will have until October 7, 2027 to apply for the appropriate authorization and may continue operating while ASIC reviews their applications.
The regulator reported that it has already received more than 140 applications from companies seeking to provide financial services related to digital assets.
