Regulator Opens Consultation on Operational Standards for Crypto Platforms
Australia's financial markets watchdog, the Australian Securities and Investments Commission (ASIC), launched a formal consultation on Thursday covering the capital, custody and trading obligations that digital asset platforms will need to meet under a new licensing regime. The move marks a concrete step toward implementing the Corporations Amendment (Digital Assets Framework) Act, which Australian Parliament passed in April and which broadens the scope of oversight over the crypto industry.
ASIC Commissioner Alan Kirkland framed the release as a recognition of the growing footprint of digital assets and tokenisation within mainstream finance. "Our proposed guidance and standards acknowledge the increasing role of digital assets and tokenization, including in traditional parts of the financial system," Kirkland stated. The guidance is designed to give operators a clear picture of what licensing, asset safeguarding and financial-resilience obligations will look like once the new framework is fully in force.
Amy-Rose Goodey, chief executive of the Digital Economy Council of Australia, described ASIC's consultation paper CP 392 as a significant milestone. "After years of engagement on regulatory reform, it's encouraging to see the focus shift towards practical implementation," she told Cointelegraph. For brokers and exchanges operating in or targeting the Australian market, the consultation effectively sets the rulebook they will need to satisfy before the statutory deadline arrives.
Three Capital Models, Offshore Custody and Quarterly Reporting
At the heart of the proposals are three alternative capital models that ASIC is weighing. One variant would require operators that do not have qualifying third-party custody arrangements to maintain net tangible assets of at least 14 million Australian dollars (roughly 9.7 million US dollars) or 10 per cent of average revenue, whichever figure is higher. Goodey noted that her council will work closely with its members to scrutinise all three options in detail, with particular attention to whether the requirements scale proportionally across firms of different sizes and what concessions will be available where third-party custody is used.
Steven Pettigrove, a partner at Piper Alderman, observed that the net tangible asset thresholds would naturally favour larger, established custodians. "The proposed NTA requirements for DAPs will encourage scale and established custodians," he said, signalling that smaller or newer entrants could face a meaningful cost barrier to compliance.
Shane Chandra, CEO of OKX Australia, welcomed the direction while acknowledging the rigour involved. "These standards are appropriately onerous," he told Cointelegraph. "They will reward operators who have already invested in compliance, capital and custody. They will challenge operators who have waited to make that investment." He added that the expectation of robust resourcing when clients hand over their assets is, in his view, entirely uncontroversial.
On the custody front, ASIC is proposing to permit offshore custody arrangements rather than mandating that all customer assets be held domestically. Goodey called this a significant decision that acknowledges the inherently global character of digital-asset markets. However, the regulator is simultaneously seeking feedback on what safeguards should apply if an overseas parent company or a related entity collapses, including whether Australian operators should retain emergency access to the private keys controlling customer wallets.
Liam Hennessy, a partner at Thomsons, pointed out that the reporting provisions partly mirror the reality that most digital assets in the Australian market are in fact held offshore, owing to global competition and infrastructure considerations. Under the proposals, operators would be required to file quarterly reports detailing the structure and addresses of custody wallets with ASIC and to retain the associated records for a minimum of seven years.
Proprietary Trading Bans and Conflict-of-Interest Safeguards
A second pillar of the consultation targets potential conflicts of interest. ASIC proposes to restrict platforms from trading for their own account on the same venue and to prohibit them from accepting benefits that would steer them to favour particular tokens. Hennessy warned that this could disrupt existing trading models, particularly for firms that rely on affiliated market makers. He explained that under the proposal, an order-matching digital asset platform — whether it brings client orders together via an order book or through matched principal trading — would be barred from trading as principal on its own platform, and its related corporate bodies would also be prevented from trading as principal through that venue. "There are model-specific exceptions. Groups that rely on an affiliated market maker should look at this first," Hennessy advised, flagging the provision as the one most likely to force structural changes in how certain firms operate.
Implementation Timeline and What Traders Should Watch
The consultation forms part of an 18-month implementation roadmap that ASIC published following the passage of the Digital Assets Framework Act in April. Stakeholders have until 27 November to submit feedback, after which ASIC intends to publish its final standards and guidance in March 2027. The legislation itself is scheduled to take effect on 8 April 2027, and operators will have a further window until 7 October 2027 to lodge their licence applications. Notably, firms will be permitted to continue operating while ASIC reviews their applications, providing a transitional bridge rather than an abrupt cessation of services.
For retail traders and institutional clients in Australia, the practical upshot is a market in which the platforms they use will be subject to defined capital backstops, transparent custody reporting and restrictions on the kinds of proprietary trading that can create conflicts of interest. The related regulatory environment also includes the possibility of fines of up to 10 per cent of annual turnover for unlicensed crypto firms, underscoring the stakes for operators that fail to meet the new requirements in time.
