Australia
Retail_Trading_Status
- Analysis ID
- #597
- Version
- Latest
- Created
- 2025-12-12 03:43
- Run
- e7bf3109...
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- Workflow Stage
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Executive Summary
Cryptocurrency trading is legal and regulated in Australia, with a dual-layer framework currently in transition. As of late 2025, Digital Currency Exchange (DCE) providers must be registered with AUSTRAC for AML/CTF compliance, a requirement enforced since 2018. A comprehensive financial services regime is being implemented following the introduction of the 'Corporations Amendment (Digital Assets Framework) Bill 2025', which requires digital asset platforms to hold an Australian Financial Services Licence (AFSL).
Key Pillars
AUSTRAC: Mandatory registration for Digital Currency Exchange (DCE) providers to comply with AML/CTF laws.
ASIC: Regulates crypto assets classified as financial products and oversees the new Digital Asset Platform (DAP) licensing framework.
Australian Taxation Office (ATO): Treats crypto assets as property for Capital Gains Tax (CGT) purposes.
Treasury: Responsible for legislative design, including the 2025 Digital Assets Framework Bill.
Landmark Laws
Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Amendment 2018) (AML/CTF Act) - Enacted: 2018-04-03
- Extended AML/CTF regulation to digital currency exchange providers, requiring them to register with AUSTRAC, verify customer identities (KYC), and report suspicious transactions.
- Source
Corporations Amendment (Digital Assets Framework) Bill 2025 (Bill 2025)
- Introduced in November 2025, this bill establishes a licensing regime for 'digital asset platforms' and 'tokenised custody platforms' under the Corporations Act, requiring them to hold an AFSL and meet custody standards.
- Source
ASIC Information Sheet 225 (INFO 225) (INFO 225) - Enacted: 2025-10-31
- Updated guidance clarifying when crypto assets are financial products and outlining the 'no-action' position for firms transitioning to the new AFSL regime until June 2026.
- Source
Considerations
Banking Access: Major banks (CBA, ANZ, NAB, Westpac) impose monthly transfer limits (e.g., $10,000) or blocks on payments to certain exchanges to mitigate scam risks.
Taxation: Crypto is not foreign currency; it is taxed as Capital Gains Tax (CGT) assets. Personal use exemptions are limited and strictly applied.
Transition Period: A 'no-action' relief period exists until June 30, 2026, allowing platforms to operate while applying for the new AFSL requirements.
Custody Rules: New standards require digital asset platforms to hold client assets on trust, separate from their own funds.
Notes
The analysis reflects the regulatory state as of December 12, 2025. The 'Allowed-Regulated' status is solidified by the mandatory AUSTRAC registration and the incoming AFSL requirement. The sector is currently in a significant transition phase from 'AML-only' regulation to full 'Financial Services' regulation.
Remaining Uncertainties
- The exact timeline for the final passage and Royal Assent of the Corporations Amendment (Digital Assets Framework) Bill 2025.
- Whether the 'no-action' period will be extended if the licensing backlog at ASIC becomes significant in early 2026.
- The long-term stance of major banks regarding payment limits once the AFSL regime is fully operational.
Detailed Explanation
Detailed Explanation
Cryptocurrency trading is legal and regulated in Australia, with a dual-layer regulatory framework that is currently in a state of transition as of late 2025. The foundational pillar is the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, which was amended in 2018 to extend its scope to Digital Currency Exchange (DCE) providers. Since April 3, 2018, these providers have been required to register with AUSTRAC, Australia's financial intelligence unit, to comply with obligations including customer identity verification (KYC) and reporting suspicious transactions. This established an initial 'AML-only' regulatory layer. The sector is now undergoing a significant evolution towards comprehensive financial services regulation following the introduction of the 'Corporations Amendment (Digital Assets Framework) Bill 2025'. This bill, introduced in November 2025, creates a new licensing regime for 'digital asset platforms' and 'tokenised custody platforms' under the Corporations Act, requiring them to obtain an Australian Financial Services Licence (AFSL) from the Australian Securities and Investments Commission (ASIC). The regulatory landscape is thus defined by AUSTRAC overseeing AML/CTF compliance and ASIC regulating crypto assets classified as financial products and the new platform licensing framework, with the Australian Taxation Office treating crypto as property for Capital Gains Tax purposes and Treasury responsible for legislative design. A critical transitional measure is ASIC's Information Sheet 225 (INFO 225), issued on October 31, 2025, which clarifies when crypto assets are financial products and outlines a 'no-action' position. This relief allows existing platforms to operate while applying for the new AFSL, provided they do so before the deadline of June 30, 2026. The incoming regime also introduces stringent custody rules, mandating that client assets be held on trust, separate from the platform's own funds. Despite this structured regulatory environment, notable practical restrictions exist, primarily concerning banking access. Major banks like CBA, ANZ, NAB, and Westpac have implemented measures such as monthly transfer limits (e.g., $10,000) or outright blocks on payments to certain cryptocurrency exchanges as a risk mitigation strategy against scams. The 'Allowed-Regulated' status for cryptocurrency in Australia is therefore solidified by the mandatory AUSTRAC registration and the incoming AFSL requirement, marking a clear path from initial anti-money laundering controls to a full financial services regulatory regime.
Summary Points
I. Regulatory Status
* Cryptocurrency trading is legal and regulated in Australia.
* Status is Allowed-Regulated, solidified by mandatory AUSTRAC registration and incoming AFSL licensing.
* The sector is in a significant transition phase from 'AML-only' to full 'Financial Services' regulation as of December 2025.
II. Key Regulatory Bodies
* AUSTRAC: Financial intelligence unit; mandates registration for Digital Currency Exchange (DCE) providers for AML/CTF compliance.
* ASIC (Australian Securities and Investments Commission):
* Regulates crypto assets classified as financial products.
* Oversees the new Digital Asset Platform (DAP) licensing framework requiring an Australian Financial Services Licence (AFSL).
* Australian Taxation Office (ATO): Treats crypto assets as property for Capital Gains Tax (CGT) purposes.
* Treasury: Responsible for legislative design, including the 2025 Digital Assets Framework Bill.
III. Important Legislation
* Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Amendment 2018):
* Enacted April 3, 2018.
* Extended AML/CTF rules to digital currency exchange providers, requiring AUSTRAC registration, KYC, and suspicious transaction reporting.
* Corporations Amendment (Digital Assets Framework) Bill 2025:
* Introduced November 2025.
* Establishes a licensing regime for 'digital asset platforms' and 'tokenised custody platforms' under the Corporations Act, requiring an AFSL.
* ASIC Information Sheet 225 (INFO 225):
* Enacted October 31, 2025.
* Provides updated guidance on when crypto assets are financial products and outlines a 'no-action' position for firms transitioning to the new AFSL regime.
IV. Compliance Requirements
* AUSTRAC Registration: Mandatory for all Digital Currency Exchange (DCE) providers.
* AFSL Licensing: Required for digital asset platforms under the new 2025 framework.
* AML/CTF Obligations: Customer identification (KYC), record-keeping, and reporting of suspicious matters.
* Custody Standards: New rules require platforms to hold client assets on trust, separate from their own funds.
* Tax Compliance: Crypto assets are subject to Capital Gains Tax (CGT); personal use exemptions are limited and strictly applied.
V. Notable Restrictions or Limitations
* Banking Access: Major banks (e.g., CBA, ANZ, NAB, Westpac) impose monthly transfer limits (e.g., $10,000) or blocks on payments to certain cryptocurrency exchanges to mitigate scam risks.
* Taxation: Crypto is not treated as foreign currency for tax purposes.
VI. Recent Developments or Notes
* Transition Period: A 'no-action' relief period is in effect, allowing platforms to operate while applying for the new AFSL, provided they do so before the deadline of June 30, 2026.
* This analysis reflects the regulatory state as of December 12, 2025.
Full Analysis Report
Full Analysis Report
Australia maintains a robust and evolving regulatory environment for cryptocurrency, characterized by a clear shift from basic AML/CTF oversight to a full financial services licensing regime. Since 2018, the foundational requirement for any entity providing digital currency exchange services has been registration with AUSTRAC. This regime is actively enforced, with hundreds of registered providers and occasional enforcement actions against non-compliant entities. This mandatory registration grants the sector 'Allowed-Regulated' status, as it constitutes a formal permission-to-operate framework.
In late 2025, the regulatory landscape matured significantly with the introduction of the 'Corporations Amendment (Digital Assets Framework) Bill 2025'. This legislation, championed by the Treasury, brings 'digital asset platforms' (DAPs) and custody providers under the Australian Financial Services Licence (AFSL) umbrella. The Bill introduces specific definitions for 'digital tokens' and 'digital asset platforms,' requiring operators to meet strict custody, disclosure, and conduct standards similar to traditional financial institutions. This move addresses previous gaps where spot trading of non-financial product tokens was largely unregulated beyond AML checks.
The Australian Securities and Investments Commission (ASIC) plays a central role in this new era. In October 2025, ASIC updated Information Sheet 225 (INFO 225) to provide granular guidance on the new laws. Crucially, ASIC issued a 'no-action' letter, providing a transitional grace period until June 30, 2026. This allows existing platforms to continue operations provided they take steps toward AFSL compliance. The guidance also clarifies that many stablecoins and staking services may already fall under existing financial product definitions.
Despite the clear legal framework, practical friction remains in the banking sector. Major Australian banks have independently implemented risk management measures, such as monthly transfer limits (often capped at AUD 10,000) and 24-hour holds on payments to crypto exchanges. These measures are framed as consumer protection against scams rather than a regulatory ban. Consequently, while the government explicitly permits and regulates the sector, operational challenges persist for retail investors moving fiat currency to trading platforms.
Australia maintains a robust and evolving regulatory environment for cryptocurrency, characterized by a clear shift from basic AML/CTF oversight to a full financial services licensing regime. Since 2018, the foundational requirement for any entity providing digital currency exchange services has been registration with AUSTRAC. This regime is actively enforced, with hundreds of registered providers and occasional enforcement actions against non-compliant entities. This mandatory registration grants the sector 'Allowed-Regulated' status, as it constitutes a formal permission-to-operate framework. In late 2025, the regulatory landscape matured significantly with the introduction of the 'Corporations Amendment (Digital Assets Framework) Bill 2025'. This legislation, championed by the Treasury, brings 'digital asset platforms' (DAPs) and custody providers under the Australian Financial Services Licence (AFSL) umbrella. The Bill introduces specific definitions for 'digital tokens' and 'digital asset platforms,' requiring operators to meet strict custody, disclosure, and conduct standards similar to traditional financial institutions. This move addresses previous gaps where spot trading of non-financial product tokens was largely unregulated beyond AML checks. The Australian Securities and Investments Commission (ASIC) plays a central role in this new era. In October 2025, ASIC updated Information Sheet 225 (INFO 225) to provide granular guidance on the new laws. Crucially, ASIC issued a 'no-action' letter, providing a transitional grace period until June 30, 2026. This allows existing platforms to continue operations provided they take steps toward AFSL compliance. The guidance also clarifies that many stablecoins and staking services may already fall under existing financial product definitions. Despite the clear legal framework, practical friction remains in the banking sector. Major Australian banks have independently implemented risk management measures, such as monthly transfer limits (often capped at AUD 10,000) and 24-hour holds on payments to crypto exchanges. These measures are framed as consumer protection against scams rather than a regulatory ban. Consequently, while the government explicitly permits and regulates the sector, operational challenges persist for retail investors moving fiat currency to trading platforms.
Source Evidence
Primary and secondary sources cited in this analysis
"The Corporations Amendment (Digital Assets Framework) Bill 2025 introduces clear, enforceable rules for businesses that hold digital assets on behalf of consumers."
"By law, any business that provides digital currency (cryptocurrency) exchange (DCE) services must be registered with AUSTRAC."
"The class no-action letter grants a sector-wide no-action position until 30 June 2026 to give firms time to consider the updated guidance and apply for licenses."
"Minister for Financial Services... has introduced the Corporations Amendment (Digital Assets Framework) Bill 2025 to Parliament."
"CBA introduced a $10,000 monthly limit on payments to cryptocurrency exchanges... ANZ has explicit $10K monthly limits."
Web Sources (8)
Sources discovered via web search grounding
Search queries used (5)
- AUSTRAC digital currency exchange register requirements
- ASIC crypto asset regulatory framework 2024 2025
- Australia cryptocurrency regulation status December 2025
- Australian banks crypto payment restrictions 2025
- Treasury Laws Amendment (Digital Assets Platforms) Bill status
https://legasy.com.au/treasury-laws-amendment-bill-2025-digital-estate/
https://www.gtlaw.com.au/insights/global-legal-insights-blockchain-and-cryptocurrency-regulation-2025
https://sumsub.com/blog/crypto-australia/
https://practiceguides.chambers.com/practice-guides/blockchain-2025/australia/trends-and-developments
https://www.tglaw.com.au/insights/practically-unpacking-treasurys-proposed-digital-assets-legislation
https://www.kwm.com/au/en/insights/latest-thinking/more-than-meets-the-eye-navigating-australias-proposed-regime-for-digital-asset-and-tokenised-custody-platforms.html
https://piperalderman.com.au/insight/asic-issues-sweeping-new-guidance-on-digital-assets-and-no-action-until-2026-for-a-range-of-providers/
https://www.reddit.com/r/BitcoinAUS/comments/1njrf8n/how_to_challenge_bank_restrictions_on_crypto/