Australia’s crypto market is growing faster than the rules governing it. As more Australians use digital assets for investing, payments, and savings, regulators are warning that the legal framework has not kept pace with how these products are being offered or promoted. That gap, they say, is creating real risks for consumers who may not know when protections apply or who is responsible when something goes wrong.
The Australian Securities and Investments Commission (ASIC) has now flagged digital asset regulation gaps as one of its major risks for 2026. The regulator warned that rapid growth across crypto, payments, and AI-driven financial services is stretching existing regulatory boundaries, allowing some firms to operate in grey areas and increasing the risk of unlicensed advice, misleading conduct, and consumer harm.
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Why ASIC Sees Crypto As A Growing Risk
ASIC’s concern is not just about bad actors. The regulator says many new businesses entering crypto and fintech are unfamiliar with traditional financial services rules, while others deliberately structure products to sit just outside existing laws. That combination, ASIC argues, makes enforcement harder and creates confusion for consumers who may assume protections exist when they do not.
The warning comes at a time when crypto use in Australia is no longer niche. Adoption climbed to about 31 percent in 2025, putting the country among the most crypto-engaged markets globally. At the same time, exposure through self-managed superannuation funds has surged, with crypto holdings growing to roughly A$1.7 billion. Major global exchanges are also positioning themselves for Australia’s pension market, signalling that digital assets are edging closer to the financial mainstream.
ASIC chair Joe Longo has been increasingly blunt about the stakes. Speaking late last year, he cautioned that Australia risks becoming a “land of missed opportunity” if it fails to adapt to blockchain-driven changes like tokenization.
Against this backdrop, the federal government is trying to close the gap. Parliament is currently debating the Corporations Amendment (Digital Assets Framework) Bill 2025, a proposal designed to bring crypto platforms into a clearer licensing regime. If passed, the law would require crypto exchanges and custody providers to hold Australian Financial Services Licenses and submit to ASIC supervision.
The focus is not on banning technology but on regulating risk. The proposed framework targets businesses that control customer assets, rather than the underlying blockchain systems themselves. Financial Services Minister Daniel Mulino summed up the concern by noting that “it’s currently possible for a company to hold an unlimited amount of client crypto without any financial law safeguards.” Under the bill, breaches could attract penalties of up to 10 percent of annual turnover, while smaller operators below certain thresholds would be exempt.
Bridging The Gap While Laws Catch Up
Recognising that legislation takes time, ASIC has also moved to manage the transition. Temporary relief measures introduced late last year allow certain crypto activities to continue without full licensing until the broader framework is in place. This includes limited exemptions for stablecoins, wrapped tokens, and omnibus custody arrangements, provided firms meet disclosure and record-keeping requirements.
ASIC has also adopted a temporary no-action stance through mid-2026, giving companies breathing room to assess whether they need licences, update compliance systems, or adjust their business models. At the same time, the regulator has made it clear that many digital asset products already fall under existing financial product laws, even if firms prefer to argue otherwise.
Australia’s regulatory push reflects a broader global tension. Crypto markets move quickly and across borders, while regulation remains national and often fragmented.
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