Australia Introduces Crypto Custody Bill With Heavy Penalties for Breaches
Australia has moved to tighten its grip on crypto exchanges and custody providers with legislation that promises tougher oversight and steep penalties for failures in asset protection.
Key Takeaways:
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Australia has introduced its first full regulatory framework for crypto custody and exchange platforms.
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The bill would require crypto firms to hold an AFSL and comply with ASIC supervision.
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Lawmakers say the reforms aim to boost productivity while strengthening investor protection.
The government says the proposed reforms could unlock as much as $24 billion in annual productivity gains while strengthening safeguards for Australians who entrust digital assets to private platforms.
Treasurer Jim Chalmers and Financial Services Minister Daniel Mulino on Wednesday introduced the Corporations Amendment (Digital Assets Framework) Bill 2025, which establishes the country’s first comprehensive regulatory framework for companies that hold crypto on behalf of customers.
The bill passed its first reading in Parliament and immediately proceeded to a second reading, opening debate on its core principles before detailed examination.
“We take Australia’s crypto industry seriously,” the ministers said in a joint statement, adding that blockchain and digital assets present “big opportunities for our economy, our financial sector, and our businesses.”
The legislation follows a Treasury consultation launched in September, which Mulino previously described as the “cornerstone” of the government’s digital asset roadmap.
While the local industry broadly welcomed the draft, several participants called for simpler rules and clearer definitions.
At the heart of the bill is a licensing overhaul. Crypto exchanges and custody providers will be required to obtain an Australian Financial Services License (AFSL), bringing them under the supervision of the Australian Securities and Investments Commission (ASIC).
The framework introduces two new license categories, “digital asset platform” and “tokenized custody platform,” reflecting the different roles firms play in holding and moving customer funds.
Mulino said the reforms target companies that control customer assets “rather than the underlying technology.”
He warned that “it’s currently possible for a company to hold an unlimited amount of client crypto without any financial law safeguards.”
Under the bill, licensed firms would have to comply with ASIC standards for transactions, settlement processes, and asset custody.
