ASIC unveils draft rules that could force Australian crypto platforms to hold up to A$14 million in capital

Australia’s corporate regulator, the Australian Securities and Investments Commission, published a wide ranging consultation on October 15 that sets out proposed operational and financial standards for crypto trading venues and custody services ahead of a licensing regime scheduled to start in 2027. Consultation Paper 392 outlines asset protection, settlement and financial requirements that, if finalised, will reshape how digital asset platforms operate in the Australian market.

What ASIC is proposing

CP 392 translates the Corporations Amendment Digital Assets Framework Act 2026 into draft standards and guidance for Digital Asset Platforms and Tokenised Custody Platforms. The paper presents a menu of technical rules covering how platforms should hold client assets, the mechanics of transactional and settlement arrangements, transparency and reporting obligations, and a range of financial requirements for licensees.

At the centre of the consultation are three alternative capital models intended to ensure solvency and resilience among licensed operators. The most stringent model would require operators who do not use specified third party custody arrangements to maintain net tangible assets of at least A$14 million, or 10 percent of average revenue, whichever is greater. ASIC says the different models are designed to balance consumer protection with the practicalities of a rapidly evolving industry.

Other notable proposals include standards for custody that aim to separate client assets from platform operating assets, transactional and settlement rules to reduce operational risk, and measures limiting proprietary trading by platforms to reduce conflicts of interest. ASIC is also proposing more frequent reporting on customer asset wallets and clearer disclosure obligations for platform operators.

Why this matters for Australian crypto firms

The consultation comes after Parliament passed the Digital Assets Framework Act earlier in 2026, a legislative package that gives ASIC expanded powers over spot trading venues and token custodians. CP 392 is the regulator’s next step in turning that legislation into enforceable standards. For many Australian operators, the proposals will translate into new compliance costs and structural changes to how they manage custody and liquidity.

Smaller local exchanges and startups that rely on lean balance sheets could face the toughest choices. If the high end capital model is adopted, firms that do not meet qualifying third party custody criteria may need to raise fresh capital, restructure custodial arrangements, seek exemptions available under the law, or consider consolidation with better capitalised providers. Those decisions could affect the mix of venues available to retail customers inside Australia.

Platforms that rely on offshore custodians will also need to consider whether those arrangements meet the criteria ASIC sets out for qualifying third party custody. The consultation signals that ASIC wants to make it harder for operators to rely on opaque offshore chains without robust oversight and contractual protections.

Industry reaction and next steps

Market groups and platform operators are already assessing the proposals. Industry participants have pushed for proportional requirements that recognise differences between large exchanges, niche tokenised custody providers, and small specialist platforms. ASIC says it will engage with stakeholders during the consultation period before publishing final standards.

ASIC has opened the consultation with a submissions deadline of November 27, 2026. The regulator indicates it intends to finalise and publish the standards early in 2027, ahead of a planned licensing start date in April 2027. The transition timetable gives existing operators time to apply for authorisations or vary existing licences, but the cost and schedule of compliance will be a central issue in responses from industry.

Broader context for Australian crypto policy

The consultation is the latest move in a multiyear effort by Australian authorities to bring digital asset activities into the mainstream regulatory perimeter while trying to limit consumer harm and market integrity risks. AUSTRAC has stepped up supervision of virtual asset providers in recent years, and the Reserve Bank of Australia and Treasury have continued work on tokenisation and central bank digital currency research. Together these actions show a coordinated push toward a regulated, but active, domestic digital asset ecosystem.

For consumers and businesses, the practical effect will depend on which capital model and custody criteria ASIC ultimately selects. If ASIC adopts higher capital thresholds and tight custody rules, the Australian market could consolidate around a smaller set of licensed, deeper pocketed platforms, potentially limiting choice but raising minimum standards for safety and market integrity. If ASIC opts for lower thresholds with tiered obligations, a broader set of providers may remain viable, but with more varied levels of protection for users.

Consultation Paper 392 is a technical and consequential document for Australia’s crypto industry. The responses that ASIC receives over the next six weeks are likely to influence whether the final rules favour stricter prudential safeguards or a more permissive approach intended to preserve innovation and competition.

Submissions to the consultation close on November 27, 2026, and ASIC plans to publish final instruments and guidance in the months before the licensing regime begins in April 2027.