Australia to license crypto exchanges and custody platforms

The Australian government this week unveiled draft legislation to bring crypto exchanges and custody providers under mainstream financial rules, requiring platforms that facilitate digital asset trading and tokenized custody to hold an Australian Financial Services Licence and meet strengthened consumer protections. Assistant Treasurer Daniel Mulino presented the reforms at a government digital asset summit, saying the bill is the cornerstone of the government's digital asset roadmap and aims to "legitimise the good actors and shut out the bad."

Under the proposal, two new categories would be added to the Corporations Act: digital asset platforms and tokenized custody platforms. Operators of those services would need an Australian Financial Services Licence issued by the Australian Securities and Investments Commission and must adopt measures to manage conflicts of interest, provide dispute resolution systems, and meet minimum custody and settlement standards. The draft also sets out rules tailored to crypto-specific activities, including wrapped tokens, public token infrastructure and staking, which officials said have not fit neatly into frameworks designed for traditional...