1. What ASIC proposed on October 15
Australia's corporate and securities regulator, the Australian Securities and Investments Commission (ASIC), opened a public consultation on October 15 on how crypto platforms should hold capital, safeguard customer assets and trade. The proposals are designed to put into practice the digital asset legislation Parliament approved in April, and written feedback is due by November 27, 2026. ASIC intends to publish its final standards and guidance in March 2027, ahead of the new regime taking effect in April 2027.
The package is published as Consultation Paper 392. It sets out three alternative capital models, limits on platforms that trade for their own account, and a requirement to report the wallets that hold customer assets every quarter. It also proposes to allow offshore custody and asks the industry what safeguards should apply if an overseas parent or related company fails.
2. Why is Australia rewriting its crypto platform rules?
The consultation is the next step after Parliament passed the Corporations Amendment (Digital Assets Framework) Act earlier this year. That law brings platforms that hold or trade digital assets for Australians inside the licensing system that already governs financial services firms. Passing the statute, however, settled only the outline of the regime. The detailed numbers, such as how much money a platform must keep in reserve and how customer coins must be protected, are left to regulators to define.
ASIC's paper is part of an 18-month implementation roadmap the regulator released after the law passed. The paper aims to give operators more certainty on three practical questions: how to obtain a licence, how to keep customer assets safe, and what financial resources they must hold. Without that detail, exchanges and custodians have little basis for deciding how much to invest in compliance before the rules start.
ASIC Commissioner Alan Kirkland said the proposed guidance acknowledges the growing role of digital assets and tokenization, including inside traditional finance. The remark reflects how the regulator is framing the exercise: not as a separate rulebook for a niche corner of the market, but as part of the wider financial system.
The approach follows a pattern seen in other jurisdictions, where lawmakers first define which activities require a licence and supervisors later fill in the prudential detail. In Australia, the practical effect is that the consultation is the stage at which the cost of doing business is actually determined. A platform's decision to apply for a licence, partner with a custodian, or reconsider its Australian presence will turn on the numbers ASIC finalizes, which is why the paper is likely to draw close attention from both local and international operators.
3. How would the three capital models work?
ASIC is weighing three capital models rather than committing to one. Under one of them, an operator that does not use a qualifying third-party custody arrangement would need to hold net tangible assets of at least A$14 million, equal to about US$9.7 million, or 10% of its average revenue, whichever figure is higher. Net tangible assets are the value of what a company owns after subtracting its liabilities and excluding intangible items such as goodwill, so the test measures real financial cushion rather than brand value.
The design links capital to custody. A platform that keeps customer assets itself carries more risk than one that hands them to an independent custodian, and the proposal reflects that by asking more of the former. Firms that use a qualifying third-party arrangement would be treated differently, and the consultation invites views on how far those concessions should go.
Amy-Rose Goodey, chief executive of the Digital Economy Council of Australia, said her members will study the models closely, particularly on whether they scale fairly across firms of different sizes and on the concessions tied to third-party custody. Shange Chandra, chief executive of OKX Australia, took a similar line, saying it should not be controversial that firms holding client assets are expected to commit serious resources.
Chandra added that the proposals could reward firms that already built compliance, capital and custody capabilities. Capital requirements of this kind serve a straightforward purpose in any financial regime: they ensure a firm can absorb losses, pay customers back and wind down in an orderly way if something goes wrong. Applying the same logic to crypto platforms signals that regulators want exchange failures to be handled with the same discipline expected of other licensed financial businesses.
4. Offshore custody and the quarterly wallet reports
One of the more notable proposals is that ASIC would permit offshore custody. Many digital assets are held on infrastructure outside Australia, and requiring everything to be stored domestically would be difficult for a market that is global by nature. Goodey described the decision not to mandate domestic custody as significant for that reason.
Permitting custody abroad creates its own exposure, and ASIC addresses it by asking whether Australian operators should have emergency access to private keys if an overseas parent company or related entity collapses. Private keys control the coins, so access to them determines whether customers can recover their assets in a failure. The question is open, and the answers will shape how much protection Australian users have when their assets sit beyond local reach.
Operators would also have to tell ASIC, each quarter, how their custody wallets are structured and which addresses they use, and they would need to keep the relevant records for seven years. Liam Hennessy, a partner at the law firm Thomsons, said the reporting requirement partly reflects Australia's dependence on offshore infrastructure, since digital assets are typically held abroad amid global competition among providers.
The seven-year record-keeping period gives supervisors a long window to reconstruct what happened to customer assets after an incident. Together with the quarterly reports, it would let ASIC compare a platform's declared custody arrangements with what is actually on the ledger, a form of oversight that is possible with crypto assets because public blockchains record movements openly.
5. Limits on trading against customers
The trading proposals target conflicts of interest. ASIC suggests restricting platforms from trading for their own account and from accepting benefits that could lead them to favor particular tokens. A venue that profits from the same market in which its customers trade, or that is paid to promote certain assets, has an incentive that may not match the customer's interest, and traditional markets have long constrained that behavior.
Hennessy said the measures could test existing trading models. As he described the draft, an order-matching entity, meaning one that brings client orders together through an order book or matched principal trading, could not trade as principal on its own platform. Its related bodies corporate would also be barred from trading as principal through it. The draft includes exceptions that depend on the type of model, and Hennessy advised groups that rely on affiliated market makers to review the rule first.
That advice matters because affiliated market makers are a common way for exchanges to keep order books liquid. If the final standards keep the restriction as drafted, some groups could have to restructure how liquidity is supplied before the regime begins.
The concern behind the proposal is not unique to digital assets. Equity and derivatives venues have for years been subject to rules that separate the operation of a market from trading against its users. ASIC's draft imports that principle into a sector where one corporate group has often run the exchange, the market-making arm and the custody service together. Hennessy's warning suggests the transition could be uneven, since some groups would have to rebuild structures that were designed before such limits existed.
6. Industry reaction: welcome, with consolidation expected
Reaction from the industry so far has been broadly constructive. Goodey called the paper an important milestone and said she welcomed the move from years of reform discussion toward practical implementation. For businesses that have waited for clear rules, concrete proposals, even contested ones, are easier to plan around than an open-ended policy debate.
Chandra went further, saying he welcomes the proposals and that they could drive consolidation across the sector. In his view the standards are demanding but fair: they reward firms that have already invested in compliance, capital and custody, and they put pressure on those that postponed such spending. The comment hints at a likely effect of any capital floor, which is that smaller or thinly funded operators may find licensing harder to reach than larger, better-capitalized ones.
Goodey's comments on proportionality point to the central tension in the consultation. A capital floor of A$14 million is manageable for an established exchange but can be a barrier for a start-up. Regulators generally try to balance protecting customers against keeping the market open to new entrants, and the three-model structure suggests ASIC is still testing where that balance should sit. Whether the final design leans toward smaller firms or larger ones will be one of the clearest signals from the March 2027 standards.
7. What happens next
The calendar is now fixed in outline. Feedback closes on November 27, 2026, and ASIC plans to issue its final standards and guidance in March 2027. The law itself takes effect in April 2027. Operators then have until October 7, 2027, to apply for the relevant licence, and they may continue to operate while ASIC assesses their applications.
For platforms serving Australians, the coming weeks are the window to influence the details. The open questions include which of the three capital models survives, whether concessions for third-party custody are widened or narrowed, how emergency key access would work, and whether the limit on principal trading by affiliates stays as strict as drafted. Each answer will affect how much capital an exchange must lock up and how it organizes its trading business, so submissions from operators, custodians and customer groups are likely to be detailed.
Beyond the details, the timetable gives the sector a defined runway. With the law in force in April 2027 and a licence application deadline of October 7, 2027, platforms have roughly six months after commencement to submit their applications and can keep trading in the meantime. That arrangement avoids a hard stop for existing services, while still requiring every operator to meet the final standards in order to hold a licence once ASIC has completed its assessment.