Today the Australian Treasury opened a consultation on regulating digital asset and tokenised custody platforms. It follows a high level strategy outlined in March which put the emphasis on licensing platforms rather than crypto issuance. Stablecoin issuers will be regulated under a separate payment licensing framework.
During a speech today, Assistant Treasurer Dr Daniel Mulino outlined the objectives. “Digital assets already fall within Australia’s existing legal and regulatory frameworks,” he said. “Despite this, failures of digital asset businesses have highlighted the consumer risks, particularly where operators pool and hold client assets without consistent safeguards. We are addressing this by extending well‑understood and time‑tested Australian financial services frameworks to target the riskiest parts of these businesses.”
A key challenge is that some platforms have fallen through regulatory gaps. In one case, there was more than a billion dollars in client assets held by an unregulated entity. The Treasury described some of the weaknesses it has witnessed as including “frozen withdrawals, insolvency proceedings, commingling with provider funds, undisclosed proprietary trading, weak governance and disclosure, fraud, and cyber theft.” Some intermediaries are already regulated, but not those that have custody of non-financial products.
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