TLDR
- ASIC releases consultation paper updating crypto regulatory guidance with 13 detailed examples
- Temporary relief offered from penalties for businesses seeking licenses
- BTC Markets CEO welcomes updates but warns about potential offshore migration
- Over 600 crypto scams removed by ASIC in last year, totaling $1.3B in losses
- Industry feedback on proposed regulations due February 28, with final guidance expected mid-2025
The Australian Securities and Investments Commission (ASIC) has unveiled a new consultation paper that aims to update its regulatory guidance on digital assets, marking a key development in the country’s approach to cryptocurrency regulation.
The paper includes 13 detailed examples explaining when digital assets qualify as financial products under the Corporations Act. These examples cover various crypto assets, including stablecoins, wrapped tokens, and staking services, providing clear guidelines for industry participants.
ASIC’s updated Information Sheet 225 (INFO 225) focuses on clarifying the classification of different digital assets. The regulator states that classification depends on the rights, benefits, expectations, and product features associated with each token.
In a move to ease the transition for businesses, ASIC is offering temporary relief from penalties for companies actively working to obtain proper licensing. This grace period comes with conditions, including mandatory membership in the Australian Financial Complaints Authority.
The regulator has demonstrated its commitment to consumer protection by removing more than 600 crypto scams in the past year. These efforts were part of a broader campaign that targeted over 5,530 fake investment platforms and 1,065 phishing scam links. The combined losses from these scams reached $1.3 billion, highlighting the scale of the problem.
BTC Markets CEO Caroline Bowler has responded positively to the updates, praising ASIC’s collaborative approach. However, she raised concerns about potential unintended consequences, particularly regarding access to stablecoins, which play a central role in decentralized finance.
Bowler warned that restrictions on stablecoin access might push Australian users toward overseas platforms. Despite these concerns, she noted that excluding non-financial products like NFTs and meme coins from regulation was a positive step for the industry.
The path to comprehensive crypto regulation in Australia has faced several delays. In October 2023, the government released a proposal suggesting that crypto exchanges and digital asset platforms should operate under existing financial services laws.
ASIC has actively encouraged crypto companies to apply for an Australian Financial Services License, offering protection from legal action during the application process. This approach aims to bring crypto businesses into the regulated financial system while maintaining flexibility during the transition period.
Swyftx CEO Jason Titman has voiced concerns about the “far-reaching implications” of ASIC’s proposed regulations. These include requirements for exchanges to issue audited prospectuses and operate under financial market rules, which could create substantial operational challenges.
The consultation paper details specific scenarios involving exchange tokens, yield-bearing stablecoins, and tokenized assets like concert tickets. ASIC is also considering additional examples for wrapped tokens and stablecoins, recognizing their complex regulatory status.
Australian regulators continue to balance innovation with consumer protection. The removal of thousands of investment scams demonstrates their commitment to maintaining market integrity while developing appropriate oversight measures.
Companies operating in the Australian crypto space must now evaluate their compliance requirements under the new guidelines. The registration process includes specific technical and operational standards that firms must meet to obtain licensing.
Industry participants have until February 28 of next year to provide feedback on the consultation paper. This feedback period allows businesses to voice concerns about compliance costs and competitive impacts before the final guidance is released.
ASIC plans to publish updated guidance by mid-2025, giving companies time to adjust their operations to meet new requirements. The regulator maintains its focus on creating clear, practical guidelines while addressing industry concerns.
