ASIC Warns of Crypto Regulation Gaps, Urges Stronger Consumer Protections

Highlights:

• ASIC flags regulatory gaps in fast-growing fintech sectors, especially digital assets.
• The regulator warns consumers face risks from unlicensed crypto, payments, and artificial intelligence firms.
• ASIC urges the government to bring new services under existing regulatory frameworks.

Australia’s main corporate regulator, the Australian Securities and Investments Commission (ASIC), says there are clear rule gaps in fast-growing fintech areas, especially digital assets. In its new report, Key Issues Outlook 2026, released on Tuesday, ASIC warned that many users are dealing with crypto, payment, and artificial intelligence companies that are expanding quickly but still operate without licenses. As a result, consumers may face higher risks.

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ASIC’s new crypto crackdown in Australia isn’t just chatter—licenses mandatory by mid-2026. Whales beware: tighter rules may squeeze liquidity and kill shady players, while retail gets a brief breath. Token stakes are high; compliance is no joke. Miss the memo, get stuck holding… pic.twitter.com/aTqaxA1ZeY

— Fama Crypto (@Famacrypt) January 27, 2026

ASIC Flags Rising Crypto Use and Pushes for Clear Rules

ASIC explained that it is the government’s job to decide if these new products and services should fall under formal rules. However, the regulator also noted that some companies may try to stay unlicensed on purpose, which creates more uncertainty in the market. Because of this, ASIC said it will keep a close watch on regulatory limits and make sure licensing rules stay clear in 2026.

The alert comes as crypto use in Australia reached 31% last year, up from 28% the year before. Self-managed superannuation funds have also grown their crypto holdings seven times since 2021, now totaling A$1.7 billion.

Australia Moves Toward Clear Digital Asset Rules

Parliament is reviewing the Corporations Amendment (Digital Assets Framework) Bill 2025. Treasurer Jim Chalmers and Minister Daniel Mulino introduced it last November. The bill would force exchanges and crypto custody providers to get Australian Financial Services Licenses. Authorities could fine companies up to 10% of their yearly turnover for breaking the rules. The law creates two new license types for digital asset and tokenized custody platforms. It targets firms that handle client funds. The government would exempt smaller companies earning less than A$10 million a year.

Mulino warned that companies can now hold unlimited client crypto without legal safeguards. The government expects the rules to add A$24 billion in yearly productivity and protect investors. ASIC Chair Joe Longo warned that Australia could miss opportunities if it does not adopt blockchain tokenization. He said, “Australia must innovate or stagnate,” and pointed to J.P. Morgan’s plan to fully tokenize money market funds in two years.

🚨HUGE MOVE!!!

Australia have put forward the Companies Act Amendment (Digital Assets Framework) Bill 2025

Establishing the country’s first comprehensive rules for businesses holding digital assets on behalf of customers.

Big step toward clarity for the sector!! pic.twitter.com/pdrGjdnymh

— Kyle Chassé 🐸 (@Kylechasse) November 27, 2025

However, until Parliament establishes long-term regulations, ASIC has established temporary regulations to simplify compliance. In December, it relaxed regulations to allow intermediaries to deal with certain stablecoins and wrapped tokens without additional licenses until mid-2028, as long as they maintain proper records and issue Product Disclosure Statements.

These regulations apply to omnibus custody structures, which are common in traditional markets but have not been used in the crypto market. In addition to this, ASIC has adopted a no-action policy until June 2026. Under current rules, stablecoins, wrapped tokens, tokenized securities, and digital wallets all require licenses.

Australia aims to close gaps that have left investors vulnerable to fraud and unclear protections. With crypto use growing and retirement funds holding more digital assets, the country wants to safeguard consumers while staying competitive globally.

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Australian regulator eases rules for stablecoins and wrapped tokens pic.twitter.com/qHIvNt1wIo

— NotificationsBots (@Adanigj) December 11, 2025

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