Australia drafts laws to tighten oversight of cryptocurrency exchanges

Australia is preparing to tighten regulations on cryptocurrency exchanges through a new draft law, expanding the scope of financial management to include digital currencies. Assistant Treasurer Daniel Mulino stated that this is a key step in the government's "digital asset roadmap," which is currently seeking public input.

According to the draft, two new financial products will be added to the Corporations Act: "digital asset platform" and "tokenized custody platform." Providers of these services will need to have an Australian Financial Services License (AFSL) and register with the Australian Securities and Investments Commission (ASIC).

The law also regulates wrapped tokens, staking, and the requirements for custody and payment standards. Violations can result in fines of up to 16.5 million AUD or 10% of revenue. However, smaller, low-risk platforms will be exempt. The goal is to increase investor confidence and eliminate less transparent entities.