Australia steps up crypto regulation, sanctions from October for unlicensed firms

Australia’s financial regulator issued a final warning telling crypto firms to hurry their applications for financial services licences. Under current law they need a licence, but firms that have operated by relying on a temporary regulatory reprieve could face civil and criminal penalties if they do not begin the process by Sept. 30, local time.

Cointelegraph reported on Sept. 3 that the Australian Securities and Investments Commission (ASIC) said crypto businesses that require an Australian Financial Services (AFS) licence should apply for a new licence or request changes to an existing licence by the end of this month. If they fail to do so, sanctions are possible, including fines of up to 10 percent of annual revenue.

Firms that need a market licence or a clearing and settlement facility licence must notify ASIC in writing of their intention to apply by Sept. 30 and also conduct prior consultations. From Oct. 1, firms that have not obtained the required authorisation or do not meet the conditions for no-action treatment risk operating in breach of the financial services law.

ASIC’s no-action measure was set up to give crypto businesses time to review new guidance and shift to a licensing regime. After revising guidance in October last year explaining when digital assets qualify as financial products, more than 45 related licence applications have been received. At the end of June, there were about 30.

The reprieve had originally been due to end on June 30, but ASIC extended it by three months to Sept. 30 and widened its scope to include firms operating through authorised representatives of existing licence holders or through some brokerage contracts.

The move is separate from Australia’s digital asset framework, which takes effect on April 9 next year. Under the new system, separate regulatory regimes apply to digital asset platforms and tokenised asset custody platforms. ASIC said many firms that obtain licences now may need additional authorisation after the new system takes effect.

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