Australia Proposes New Safeguards for Crypto Customer Assets

An Australian financial regulator has opened a consultation on proposed rules for digital asset platforms covering capital requirements, customer asset custody, and conflicts of interest, ahead of a new licensing framework taking effect in 2027.

The Australian Securities and Investments Commission (ASIC) launched the consultation on October 15, following legislation passed in April to bring digital asset platforms and tokenized custody platforms into the financial services licensing framework.

ASIC is considering three alternative capital models. Under one option, operators that do not meet specified third-party custody conditions would need net tangible assets of at least A$14 million (approx. US$9.75 million) or 10% of average revenue, whichever is higher.

The regulator proposes allowing assets to be held overseas, while seeking views on emergency access to private keys if a foreign parent or related company fails. Operators would also have to submit quarterly lists of wallets and addresses holding customer assets to ASIC, while retaining records of wallet structures and asset control arrangements for at least seven years.

To address conflicts of interest, ASIC proposes restricting operators of order matching platforms and related companies from trading for their own account through those platforms. Platforms would also be prohibited from accepting benefits to favor particular tokens.

Feedback is due by November 27, with final standards and guidance planned for March 2027. The legislation takes effect on April 8, 2027. Existing operators covered by the framework will have until October 7, 2027, to apply for an Australian financial services license or license variation, and may continue operating while ASIC assesses their applications.