If your startup touches digital assets in any way — whether you’re building a crypto exchange, issuing tokens, offering custody services, or simply accepting cryptocurrency as payment — 2026 is the year Australia’s regulatory framework catches up with you.
For years, the regulatory position on digital assets in Australia has been frustratingly ambiguous. ASIC published general guidance, Treasury floated proposals, and the industry operated in a grey zone where the rules were technically in place but rarely enforced with any specificity. That era is ending. Between ASIC’s updated Information Sheet 225 (INFO 225), the sector-wide no-action position expiring on 30 June 2026, and the Corporations Amendment (Digital Assets Framework) Bill 2025 now backed by a Senate committee, founders need to understand what’s coming and act accordingly.
The Current State of Play
ASIC’s Updated INFO 225
In October 2025, ASIC released its most significant update to INFO 225 since the information sheet was first published in 2017. The update doesn’t change the law — it’s guidance, not legislation — but it represents ASIC’s clearest statement yet on how it interprets existing financial services law in the context of digital assets.
The key takeaway: ASIC considers that most digital assets are financial products under the Corporations Act 2001 (Cth). This includes stablecoins, wrapped tokens, tokenised securities, yield-bearing tokens, and digital asset wallet services. In ASIC’s view, only a narrow category of widely traded tokens — Bitcoin, some memecoins, and potentially certain asset-referenced tokens — fall outside the financial product definition.
What this means practically is that if your startup deals in, issues, or provides custody for digital assets that ASIC considers to be financial products, you likely need an Australian Financial Services Licence (AFSL) with the appropriate authorisations.
The No-Action Position
Recognising that the industry needs time to adjust, ASIC granted a sector-wide no-action position until 30 June 2026. This means ASIC won’t take enforcement action against digital asset businesses that are operating without the required AFSL — provided those businesses take steps to apply for the appropriate licence before the deadline.
This is not a blanket exemption. ASIC has been explicit that it will still act against “egregious conduct” involving significant consumer harm or systemic misconduct. The no-action position is transitional support, not a free pass.
If your startup is currently operating in the digital assets space without an AFSL, the clock is ticking. You should be assessing your licensing requirements now and, if needed, preparing an AFSL application well before June.
The Digital Assets Framework Bill
Running in parallel with ASIC’s guidance is a more fundamental legislative reform. The Corporations Amendment (Digital Assets Framework) Bill 2025, introduced by Assistant Treasurer Daniel Mulino, creates two new categories of financial product:
- Digital asset platforms — exchanges and trading platforms that facilitate the buying, selling, and exchange of digital assets on behalf of customers.
- Tokenised custody platforms — services that hold digital assets on behalf of customers, including crypto wallets and custody providers.
On 16 March 2026, the Senate Economics Legislation Committee recommended the Bill be passed, giving it significant momentum toward becoming law.
What the Bill Requires
Operators of digital asset platforms and tokenised custody platforms will need to hold an AFSL. The AFSL framework brings with it a suite of obligations that many crypto businesses haven’t previously had to comply with:
- Duty to act efficiently, honestly and fairly — the general conduct obligation that applies to all AFSL holders.
- Prohibitions on misleading and deceptive conduct and unfair contract terms.
- Disclosure obligations — customers must receive clear information about how their assets are held, what their rights are, and what risks are involved.
- Governance and risk management requirements, including maintaining adequate financial resources and operational resilience.
- Internal and external dispute resolution — including membership of an ASIC-approved external dispute resolution scheme (currently the Australian Financial Complaints Authority).
- Compensation arrangements — ensuring customers can be compensated if things go wrong.
The Small Platform Exemption
The Bill includes a proportionate exemption for smaller, lower-risk platforms. If your platform holds less than $5,000 per customer and facilitates less than $10 million in transactions per year, you won’t need an AFSL for these specific activities.
This threshold is consistent with the approach for other financial products, like non-cash payment facilities, and is designed to avoid imposing disproportionate compliance costs on early-stage startups and smaller operators. But the exemption has conditions, and it applies only to the platform activities themselves — if your tokens are independently classified as financial products (for example, because they’re managed investment scheme interests), you may still need licensing for those dealings regardless of your platform size.
Transition Period
If the Bill passes in its current form, firms without an AFSL will have six months from commencement to obtain the required authorisation. Combined with ASIC’s no-action position (which expires 30 June 2026), this creates a window for businesses to get compliant — but not a generous one. AFSL applications typically take ASIC several months to process, so leaving it to the last minute is a risk.
Token-by-Token Analysis: The Compliance Burden
One of the most challenging aspects of the current framework — and this applies whether or not the Bill passes — is ASIC’s insistence on a token-by-token analysis to determine whether each digital asset is a financial product.
There’s no blanket classification. Each token must be assessed against the definitions in the Corporations Act to determine whether it constitutes:
- A facility for making a financial investment — does the token involve a person contributing money to generate a financial return?
- An interest in a managed investment scheme — are contributions pooled and managed by a third party to produce benefits?
- A security (share or debenture) — does the token represent an ownership interest or a debt obligation?
- A derivative — does the token’s value derive from an underlying asset, and does it involve contingent obligations? (ASIC controversially includes wrapped tokens in this category.)
- A non-cash payment facility — can the token be used to make payments?
For a startup that lists or supports dozens or hundreds of tokens, this analysis is resource-intensive. Each token requires a legal assessment based on its specific features, use case, and economic substance. Getting it wrong — treating a financial product as a non-financial product — exposes you to potential enforcement action.
AUSTRAC Registration: The Other Obligation
Separate from ASIC’s financial product framework, any business that exchanges digital currency (buying, selling, or exchanging cryptocurrency for fiat or other digital currency) must register with the Australian Transaction Reports and Analysis Centre (AUSTRAC) as a digital currency exchange (DCE) provider.
This has been the case since 2018, but compliance has been uneven. AUSTRAC registration carries its own obligations, including implementing an AML/CTF (Anti-Money Laundering and Counter-Terrorism Financing) program, conducting customer due diligence, and reporting suspicious matters and threshold transactions.
The AML/CTF Amendment Act 2024 is also expanding the range of entities subject to regulation — the so-called “tranche 2” reforms — with updated standards becoming mandatory by July 2026. If you’re operating a DCE, ensure your AML/CTF program meets the current and incoming requirements.
What Founders Should Do Now
1. Audit Your Token Exposure
If your startup deals with digital assets, identify every token you issue, list, trade, or custody. For each one, get a legal assessment of whether it’s a financial product under the Corporations Act. This is the foundation for understanding your licensing obligations.
2. Assess Your AFSL Position
Based on that audit, determine whether you need an AFSL and what authorisations are required. If you’re currently operating under ASIC’s no-action position, start the application process now. AFSL applications are complex, and ASIC’s processing times can stretch beyond six months.
3. Check Your AUSTRAC Registration
If you’re operating a digital currency exchange or providing exchange services, confirm you’re registered with AUSTRAC and that your AML/CTF program is current. The incoming tranche 2 reforms may expand your obligations.
4. Design for Compliance
If you’re building a new digital assets product, design the compliance framework into the product from the start. Bolting on licensing, disclosure, and dispute resolution requirements after launch is significantly more expensive and disruptive than building them in from day one.
5. Watch the Bill
The Digital Assets Framework Bill has Senate committee support, but it still needs to pass both houses of Parliament. The final version may differ from the current draft, particularly around the scope of exemptions and transition periods. Monitor the legislative process and be ready to adapt.
The Bottom Line
Australia’s digital assets regulatory framework is moving from ambiguity to enforcement. The combination of ASIC’s updated INFO 225, the expiry of the no-action position in June 2026, and the Digital Assets Framework Bill means that startups operating in this space can no longer rely on regulatory grey zones.
The good news is that the framework is, broadly, proportionate. The small platform exemption protects early-stage startups from disproportionate compliance costs, and the transition periods give existing operators time to get licensed. But “time” is relative — AFSL applications take months, and the deadlines are approaching fast.
If your startup is building in the digital assets space and you need help assessing your regulatory position, get in touch. We work with Australian startups navigating ASIC licensing, token classification, and compliance frameworks — and the earlier you start, the smoother the process.
