ASIC Clarifies Licensing Path For Exchanges and Custodians

Australia has taken another decisive step toward bringing the crypto sector under mainstream financial regulation, with the Australian Securities and Investments Commission (ASIC) publishing updated guidance designed to bolster investor protection while supporting digital asset innovation.

The move, announced on 29 October 2025, builds directly on the trajectory that Lagom Consulting highlighted in our earlier article, “Australia moves to license crypto exchanges and custodians.” In that article, we examined how the Treasury’s proposed licensing regime, which would require crypto exchanges and custodians to hold an Australian Financial Services Licence (AFSL), would formalise oversight of an industry that has long operated in a regulatory grey zone.

Now, ASIC’s latest guidance effectively puts that framework into motion.

ASIC’s message: the time for ‘wait and see’ is over

ASIC’s updated guidance makes one thing clear: many digital asset businesses are already within the perimeter of existing financial services law, and those that are not soon will be.

The regulator has confirmed that arrangements involving stablecoins, wrapped tokens, tokenised securities, and custody of digital assets are to be treated as financial products. This classification triggers AFSL requirements and consumer protection obligations for platforms operating in Australia.

ASIC Commissioner Alan Kirkland stated that the move is designed to ensure digital asset investors receive “the full suite of protections under the law,” while still giving legitimate innovators space to adapt. To that end, the regulator has introduced a no-action position until 30 June 2026, allowing firms time to transition without immediate enforcement action, provided there is no evidence of misconduct or significant consumer harm.

The regulator has also proposed limited relief instruments for stablecoin and wrapped-token providers, as well as custodians, with industry feedback invited until mid-November.

Lagom Consulting’s view: regulatory clarity meets commercial opportunity

In our September article, we noted that the draft Treasury Laws Amendment (Regulating Digital Asset, and Tokenised Custody, Platforms) Bill 2025 would bring exchanges and custodians into line with other financial institutions, applying the same standards of fairness, efficiency, and financial adequacy.

We argued that, while compliance costs would inevitably rise, the shift would ultimately strengthen Australia’s appeal as a credible digital asset hub, unlocking institutional participation and supporting innovation in tokenisation.

ASIC’s announcement this week validates that position. The regulator’s proactive stance, clarifying that many services already fall under the Corporations Act, means the transition to a fully licensed model is effectively underway months before the legislation itself passes.

We also noted that the tightening regime would likely increase demand for existing AFSLs, as unlicensed operators look to acquire authorised entities rather than face lengthy new applications. That dynamic now seems inevitable: the no-action window buys time, but it also fuels competition for compliant routes to market.

A pivotal moment for Australia’s crypto sector

With the Treasury’s legislative reforms expected to come into force 12 months after Royal Assent, ASIC’s intervention accelerates the market’s adjustment. Exchanges, custodians, and tokenisation platforms now have a clear timeline to become compliant or risk losing their ability to operate legally.

For investors, the benefits are equally clear: enhanced oversight, defined disclosure obligations, and greater transparency over how digital assets are held and traded. For legitimate operators, it provides the regulatory certainty long sought by banks, fintechs, and institutional entrants considering entry into the sector.

The message is unmistakable: Australia is moving from permissive experimentation to professional regulation.

What happens next

The consultation period for ASIC’s relief instruments closes in mid-November, and further technical standards are expected early next year. Once the Treasury Bill receives Royal Assent, firms will have a 12-month transition to secure their AFSL or operate under an authorised arrangement.

As Lagom Consulting observed, this two-track approach of policy reform from Treasury and practical enforcement from ASIC is setting Australia apart as a jurisdiction that combines innovation with accountability.

The crypto sector’s long-promised legitimacy is finally arriving, but so too are the expectations that come with being part of the regulated financial system.

 Ready to move fast in Australia’s new digital asset landscape?

At Lagom Consulting, we combine deep roots in the Australian financial services market with global expertise in helping firms scale across borders. Whether you’re looking to navigate ASIC’s licensing process or secure an existing AFSL, we can open the right doors, including making introductions to several financial services licences currently available for sale. If expansion is on your agenda, we’ll help you do it with confidence and speed.

Who are Lagom Consulting? 

At Lagom Consulting, we pride ourselves on being more than marketing and management consultants; we are your strategic allies in building marketing strategies to market into financial services market.  

Our ethos centres around delivering first-class service, underpinned by a hands-on approach that melds practical problem-solving with time-tested marketing solutions. We recognise that effective marketing is an ongoing journey, not a one-off exercise. We steer clear of ‘random acts of marketing’, opting instead for a comprehensive and sustained approach.  

Working with Lagom Consulting means gaining more than a consultant; it means acquiring a partner committed to your enduring success