Australia Moves Ahead with Crypto Custody Bill as Licensing Debate Expands

Highlights:

• Australia has moved to tighten rules for crypto platforms and set clear duties for firms that hold digital assets.
• The crypto custody bill sets new license paths for exchanges and custody firms.
• The new rules will guide asset handling and risk disclosure as digital asset activity grows.

Australia has moved ahead with a major shift in crypto oversight as lawmakers opened debate on the Digital Assets Framework Bill 2025. Assistant Treasurer Daniel Mulino introduced the bill in the House and said the country must modernize its rules to match global changes. He stressed that digital assets now influence financial markets and demand stronger safeguards. He also said Australia can attract investment if it builds a clear and stable regulatory system.

Australia Moves to Regulate Crypto Platforms Under New Consumer – Protection Law

The new framework subjects exchanges and custody providers to financial services laws with ASIC as the primary regulator.#bitcoin #ethereum

— Insider.Space (@InsiderDotSpace) November 27, 2025

The bill was based on a Treasury consultation, which had started in September. The industry groups accepted the draft but requested simpler rules and definitions. Mulino observed that businesses still have the ability to possess unlimited client crypto without any legal safeguards. He claimed that this loophole subjects the customers to fraud or collapses like the FTX. He further added that the new bill would seal these gaps and harmonize digital asset activity with financial service requirements.

The legislation moved quickly through the House. Lawmakers opened a second reading to examine the bill’s core principles before a detailed review. Mulino told the chamber that a clear licensing model will support innovation and reduce loopholes.

Crypto Custody Bill Introduces New License Categories and Customer Protection Rules

The bill creates two new financial product categories under the Corporations Act. These categories are digital asset platforms and tokenized custody platforms. Both categories fall under the Australian Financial Services License regime. This change brings exchanges and custody providers under direct supervision by the Australian Securities and Investments Commission.

The bill sets new rules for platforms that hold customer assets. Providers must meet standards for transactions, settlements, and custody. They must explain their services and risks in a client guide. The guide should define fees, the management of assets, and the responsibilities of the platform.

The framework also covers companies that help others deal in crypto. Mulino said that firms advising, dealing, or arranging crypto activity must hold a license. This step aligns crypto activity with traditional financial service rules. It also sets common expectations across companies that manage customer assets.

Small operators receive exemptions. Companies with less than A$10 million in transaction volume over 12 months do not need a license. Firms that deal with crypto as a secondary component of their primary service are also entitled to exemptions. The bill will provide a grace period of 18 months to allow businesses to adapt to the new structure.

Senate Path Shapes Australia’s Push for Stronger Crypto Oversight

The bill is expected to pass the House, where the Labor Party holds a strong majority. The Senate process will present a tougher challenge. Lawmakers from the crossbench and the opposition will play a key role in the final outcome. The government still expects broad support because crypto oversight has become a national focus.

Australia continues to tighten its rules across the digital asset sector. Home Affairs Minister Tony Burke announced last month that crypto ATMs would be regulated in response to increased crime risks. He referred to these machines as high-risk products and associated them with money laundering issues. In the meantime, ASIC stated that it had taken down over 14,000 scam and phishing sites since July 2023.

JUST IN: Australia’s Home Affairs Minister announces new sweeping powers aimed at curbing crypto ATMs to combat money laundering and illicit activities, tightening regulations on $crypto transactions and ATM operations nationwide.

— Bitcoin Dominance (@MoneyHustl41075) October 16, 2025