Australia’s securities regulator on Thursday began consulting on proposed capital, custody, and trading requirements for crypto platforms as it prepares to implement a law passed in April that expands oversight of the industry.
The proposals include three alternative capital models, restrictions on platforms’ proprietary trading, and quarterly reporting on wallets holding client assets. ASIC is also proposing to allow assets to be held overseas and is seeking feedback on safeguards in the event of the insolvency of a foreign parent or related company.
“Our proposed guidance and standards recognize the growing role of digital assets and tokenization, including in traditional segments of the financial system,” ASIC Commissioner Alan Kirkland said.
The proposed guidance and standards will give crypto operators greater clarity on licensing requirements, safeguarding client assets and meeting financial requirements under the new framework. The consultation follows the passage of the Corporations Amendment (Digital Assets Framework) Act by Parliament earlier this year.
“ASIC’s release of Consultation Paper 392 is an important milestone for Australia’s digital assets industry,” Digital Economy Council of Australia CEO Amy-Rose Goody told Cointelegraph. “After several years of work on regulatory reform, it is encouraging to see the focus shift to practical implementation.”
OKX Australia CEO Shangee Chandra also welcomed the proposals, saying they could help consolidate the industry.
“These standards are reasonably stringent,” he told Cointelegraph. “They will benefit operators that have already invested in compliance, capital and custody. They will present challenges for operators that have put off those investments.”
Capital, custody and trading rules in focus
ASIC is considering three alternative capital models, including one under which operators without compliant arrangements with independent third-party custodians would need to hold at least 14 million Australian dollars ($9.7 million) in net tangible assets or 10% of average revenue, whichever is greater.
“We will work closely with our members to examine the three proposed capital models in detail, particularly their proportionality for companies of different sizes and the available relief for third-party custody,” Goody said.
“From our perspective, there is nothing controversial about ensuring this level of resources and care when clients entrust you with their assets,” Chandra said.
The regulator also proposed allowing assets to be held offshore and sought feedback on whether Australian operators should be granted emergency access to private keys in the event of the insolvency of a foreign parent company or custodian.
“The proposal not to mandate domestic custody is also significant and recognizes the global nature of digital asset markets,” Goody said.
ASIC is also proposing to restrict platforms from proprietary trading and receiving benefits for promoting certain tokens, targeting potential conflicts of interest.
“The proposed restrictions on proprietary trading, liquidity arrangements with related parties and best execution requirements will also require careful consideration in light of their implications for the operations of Australian exchanges and access to liquidity,” Goody said.
Chandra also called for a streamlined licensing process for established companies with a proven compliance track record.
The consultation is part of ASIC’s 18-month implementation roadmap, published after the Digital Assets Framework Act was passed in April.
Feedback is open until November 27, and ASIC expects to publish final standards and guidance in March 2027. The law is due to take effect on April 8, 2027, and operators will have until October 7, 2027, to apply for the relevant license and continue operating while ASIC considers their applications.