Under proposed Australian Securities and Investments Commission (ASIC) changes, companies operating in the crypto sector will be required to obtain an Australian Financial Services Licence.
ASIC has published Consultation paper 381 Updates to INFO 225: Digital Assets: Financial Products and Services (CP 381) outlining proposals for updating Information Sheet 225 Crypto Assets (INFO 225).
The CP 381 consultation package is aimed at all firms involved in digital assets, including:
- Existing financial services and financial markets businesses, including those exploring blockchain technology for existing business products and real-world assets (e.g. tokenisation).
- New digital asset businesses.
- Brokers and intermediaries.
- Professional advisers to the above businesses.
ASIC first published INFO 225 in September 2017, updating in 2018, 2019 and 2021. ASIC’s position is that many digital assets are financial products under the current law.
CP 381 is aligned to and supportive of the Government’s broader work in relation to the proposed payment services reform and digital asset facility reforms.
To clarify the current law, ASIC has proposed a number of changes to INFO 225. The updates include 13 examples of how financial product definitions apply to digital assets.
ASIC Commissioner Alan Kirkland said, "We want to promote the growth of responsible financial innovation while ensuring consumer protection. A well-regulated financial system benefits everyone in the community as it supports consumer confidence, market integrity and facilitates competition and innovation.
"Australia’s financial services regulatory regime is broad and technology neutral. Many digital assets and related products are financial products under the current law. Stakeholders have been calling for greater clarity and in response, we are releasing our draft updated guidance.
"We encourage all stakeholders to engage with the consultation process. We recognise that industry will need some time to consider and act on our updated guidance, so we are also consulting on a proposed transitional approach."
ASIC's existing financial services licence approach will apply to digital assets. For example, whether an applicant proposes to deal in traditional securities or securities based on a digital asset platform, the same licensing regime applies.
CP 381 seeks feedback on:
- ASIC’s updated guidance in INFO 225, including worked examples,
- The application of Australian Financial Services (AFS) licence processes, ASIC guidance and standard conditions to digital asset businesses.
- Practical licensing issues for wrapped tokens and “stablecoins”, issues arising from the potential transition to the Government’s proposed digital asset platform and payment stablecoins regimes, and consideration of potential regulatory relief, and
- A potential class “no action” position for digital asset businesses that are in the process of applying for or varying an AFS licence, Australian Markets Licence or Clearing and Settlement Facility licence.
ASIC wants feedback on the proposed updated INFO 225 and the issues raised in CP 381 by 5pm on 28 February 2025. You can find details on how to respond in the consultation document.
After considering feedback from the consultation process, ASIC plans to publish a final version of INFO 225 in mid-2025.
Related content
- Consultation paper 381 Updates to INFO 225: Digital Assets: Financial Products and Services
- ASIC's MoneySmart website has information for investors about the risks of investing in crypto.