The Australian Securities and Investments Commission has listed deficiencies in crypto asset regulation in Australia as a critical risk for the current year. According to the report of the agency’s Chair, Joe Longo, the rapid growth of platforms operating at the edge of the law is exposing citizens to unlicensed financial advice and misleading conduct within the markets.
This scenario unfolds as Canberra moves forward with long-awaited licensing legislation designed to close existing legal gaps in digital assets and oversight. The bill, introduced in late 2025, seeks to establish the first comprehensive regulatory framework for businesses holding customer funds, strictly requiring an Australian Financial Services Licence for their ongoing operations.
Likewise, the regulatory body noted that some entities deliberately seek to remain outside of regulatory control, which complicates enforcement and compliance efforts significantly. This lack of uniformity in global frameworks is creating fragmentation that makes technical compliance difficult, significantly increasing the risk that consumers receive unequal and overall ineffective protections across different platforms.
Licensing challenges and the impact on technological innovation
The implementation of these new regulations promises to unlock productivity gains estimated at twenty-four billion dollars annually, transforming the local operating landscape. Darcy Allen, Associate Professor at RMIT University, argues that clearly defining the legal perimeter is the most effective action to foster growth, allowing companies to operate under clear, secure, and predictable rules.
On the other hand, industry experts emphasize that Australia must balance oversight with support for experimental innovation and development. Strengthening crypto asset regulation in Australia through enhanced regulatory sandboxes would allow companies to test new financial products without licenses, provided that market integrity and the overall security of funds are strictly guaranteed.
How will the new licensing laws affect international exchange platforms operating in Australia?
It is also important to highlight that the complexity of these technologies requires a renewed focus on end-user education and awareness. James Volpe, director of uCubed, warns that the understanding of the digital ecosystem remains limited, so ensuring that consumers are protected will take time and a constant focus on technical training regarding the risks associated with financial decentralization.
Finally, the success of these reforms will depend on the ability of regulators to adapt to a constantly changing technological environment. The consolidation of technology like blockchain within a robust legal framework represents a milestone that will define the country’s growth trajectory, ensuring that Australia remains competitive while mitigating the inherent risks of emerging asset markets and platforms.
