AUSTRALIA Law and Practice Contributed by: Steven Pettigrove, Katrina Sharman, Luke Higgins and William Deeb, Piper Alderman
and misleading statements in relation to a digital wal- let product, alongside a ten year ban on operating a financial services business without a licence and mandatory corrective disclosures. AUSTRAC has previously taken action to refuse, can- cel or suspend a Digital Currency Exchange (DCE) registration in a number of cases, which it published on its website. In 2025, AUSTRAC ran a “use it or lose it” campaign targeting inactive DCEs, resulting in the cancellation or voluntary withdrawal of 62 registra- tions. In more recent times, AUSTRAC has imposed stricter compliance requirements on cryptocurrency ATMs and enhanced supervision of AML compliance and the reporting of suspicious matters. Cross-Border Enforcement Regulators address cross border activity through a ter- ritorial approach, under which Australian law applies where services are provided to Australian investors. ASIC and AUSTRAC have expressly warned that off- shore firms cannot avoid compliance by structuring operations outside Australia while targeting the local market, subject to applicable regulatory exemptions. Outlook of Regulator Attitude Looking forward, the regulatory stance is likely to become more interventionist as the new reforms come into force. Ongoing reforms and the expiration of tran- sition relief (eg, June 2026 deadlines) indicate a shift toward full-compliance expectations and intensified enforcement across the sector. 3. Licensing and Set-Up Requirements 3.1 Licensing Requirements Triggers for Requiring a Licence In Australia, there is no standalone crypto licens- ing test; the trigger is whether a person carries on a “financial services” business under the Corporations Act. Under ASIC’s INFO 225 framework, licensing is typi- cally required where a crypto business:
• issues or deals in tokens that are financial products (eg, derivatives, managed investment schemes, securities or non–cash payment facilities); • provides financial services, such as advising, deal- ing, custodial services or making a market; or • operates a wallet or platform that facilitates pay- ments or investment features. Separately, ASIC’s Information Sheet 219 sets out an assessment tool to help businesses identify whether an AFSL may be required for blockchain-based ser- vices. This tool includes a set of factors to be consid- ered by the business, such as: • which blockchain platform is being used; • how it will be run; • how it works under the law; • how the blockchain is using the data; and • how the blockchain affects others. Recent reforms under the DAF Act bring exchang- es, custodians and platform operators (DAPs/TCPs) squarely within the AFSL regime. Although the DAF Act establishes new financial product categories, tokens must be assessed on a case-by-case basis to determine whether additional licensing authorisations are required to carry on the business. Territorial Limits The regime applies where an entity is “carrying on a financial services business in Australia”, regardless of where it is incorporated. Foreign entities may require a licence if they: • provide services to Australian clients on a system- atic and ongoing basis; • have a sufficient connection to Australia (eg, local agent, infrastructure); or • engage in “inducing conduct” (marketing or solicit- ing Australian investors). Whether this threshold is met is fact–specific and includes factors such as continuity of activity and the presence of Australian operations.
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