Australia to require crypto firms to hold financial services licenses

Australian regulators are reportedly preparing new legislation to require cryptocurrency exchanges to obtain financial services licenses.

Licensing requirements for crypto exchanges in Australia are set to be extended beyond those related to digital currency exchanges, The Australian Financial Review (AFR) reported.

According to Australian Securities and Investments Commission (ASIC) commissioner Alan Kirkland, the new requirements are necessary because the regulator considers that the Corporations Act captures most major crypto assets like Bitcoin (BTC) and Ether (ETH).

The commissioner disclosed the authority’s plans at the AFR Crypto Crypto and Digital Assets summit in Sydney on Sept. 23.

New regulatory guidance to be released in November

The ASIC is preparing to update the Corporations Act’s Information Sheet 225 to provide more clarity on how particular crypto tokens and certain products should be treated from a regulatory perspective, Kirkland reportedly said before his appearance at the event.

“ASIC’s message is that a significant number of crypto asset firms in the Australian market are likely to need a license under the current law,” the commissioner stated. “This is because we think many widely traded crypto assets are a financial product,” Kirkland noted.

According to the report, the updated legislation is expected to be issued by November 2024.

This is a developing story, and further information will be added as it becomes available.