The corporate regulator has concluded its consultation on amendments to Information Sheet 225 (INFO 225) on cryptocurrency assets, which aim to provide clearer guidance on how the Corporations Act applies to cryptocurrency and digital assets.
Among the changes proposed by ASIC are licensing requirements for entities providing financial services related to these assets.
Speaking at the AFCA forum on Thursday, Patrick Hartney, senior ombudsman, said AFCA could gain up to an additional 100 members if the changes are implemented.
“The proposed changes to info sheet 225 provided 13 examples of when ASIC would consider a digital asset to be a financial product – including a facility to make a financial investment, managed investment scheme, offer of a security, or a non-cash payment facility,” he said.
“If those changes go ahead, that is going to result in a lot of digital asset providers requiring AFSLs, and then as a result of that requiring AFCA membership.”
Hartney revealed that, over the past year, cryptocurrency ranked as the fourth most common product in investment and advice complaints received by AFCA.
“That’s because we have voluntary members in the digital asset space, so our decision makers, our jurisdiction teams, our caseworkers, we’re all familiar with cryptocurrency, and we’re looking forward to taking on new members,” he said.
“With taking on an AFSL and having to meet the dispute resolution requirements … That’s going to involve the digital asset providers having an internal dispute resolution policy, as well as having an external dispute resolution process.”
On Wednesday, as part of its annual fee review process, AFCA said it will apply an increase of 3.5 per cent to its annual registration fee, payable by all members, from 1 July 2025.
In a written statement, it said: “As a not for profit, AFCA takes a careful and considered approach to our fees. We have a user pays funding model, and even with the new fee increase, thanks to our low annual registration fee and five free complaints model, approximately 98 per cent of AFCA members will pay less than $400 in total fees and charges for AFCA each year.
“Over 50 per cent of our complaints we receive will be resolved for under $100.”
Speaking at the forum, chief executive David Locke said a key way for firms to reduce their fees is by tapping into their own internal dispute resolution (IDR) schemes.
“We have been having conversations with boards and senior leadership at these firms about how, if they invest money in recruiting more staff to deal with IDR then you will pay AFCA less money, and less complaints will come through to us,” Locke said.
“If you have matters which are awaiting allocation, then there’s a real incentive for you to work with us to resolve them because the fees increase significantly if they aren’t resolved at the IDR stage and progress to case management. If you can resolve them before they come to us, then we can reduce the costs significantly.”
Complaints to AFCA increased to 104,861 in 2023–24, which, Locke shared, doubled the number of complaints five years ago. This was exacerbated by large-scale matters such as Dixon Advisory and United Capital Group.
As a result, AFCA has increased its complaints handling workforce by 40 per cent and brought in surge workers for specific cases.
Locke said: “There are lots of matters that come through to AFCA that should be nowhere near an external dispute resolution scheme, such as service and delay complaints, and these cases come to us and then they are waiting because nobody is resolving them at your end or at our end.
“AFCA was never set up to resolve problems like delays. We should be handling matters where there is a significant legal or evidential dispute, rather than this process work.”
