The company said the federal government’s draft framework represents an opportunity to scale innovation while giving their clients the assurance that their assets are protected under a strong regulatory framework.
“For too long, businesses and investors have operated in a grey zone – keen to innovate but constrained by regulatory uncertainty. This framework finally provides the clarity and confidence our $3+ billion sector has been calling for,” CloudTech chief financial officer and executive director Mandy Jiang said.
Assistant Treasurer Daniel Mulino unveiled the draft at the Digital Economy Council of Australia’s regulatory summit, describing it as “the cornerstone of our digital asset roadmap”.
“It is about legitimising the good actors and shutting out the bad, giving businesses certainty and giving consumers confidence,” Assistant Treasurer Mulino said.
The government cited the importance of working with industry, regulators and the broader community to make Australia a leader in the global digital asset ecosystem.
“Our approach is informed by similar moves in peer jurisdictions such as the United States, the European Union and the United Kingdom. By aligning with international best practice, Australia can boost the global competitiveness of our digital asset sector,” Assistant Treasurer Mulino said.
The bill proposes formally introducing digital asset platforms and tokenised custody platforms as financial products under the Corporations Act, bringing them under ASIC oversight.
“Digital assets already fall within Australia’s existing legal and regulatory framework … despite this, failures of digital asset businesses have highlighted the consumer risks, particularly where operators pool and hold client assets without consistent safeguards,” Assistant Treasurer Mulino said.
Digital asset businesses will be required to hold Australian Financial Services Licenses (AFSL), with penalties for non-compliance of up to the greater of $16.5 million, three times the benefit obtained, or 10 per cent of annual turnover.
Smaller platforms with limited activity will be exempt, with the consultation period running until 24 October.
CloudTech said that by aligning digital assets with existing financial services laws, the government is making it clear that this market is here to stay – and that it will be held to the same standards as traditional financial products.
“This approach not only supports credible operators but also strengthens consumer protections, striking the balance needed to drive sustainable, long-term growth,” Jiang said.
CloudTech said the draft framework mirrors international successes such as the UK’s FCA principles and Europe’s MiCA regime.
“It’s a big step toward giving advisers, fund managers and institutions the confidence to integrate digital assets into portfolios with the same oversight and protections as any other financial product,” Jiang said.
Crypto.com general manager Vakul Talwar echoed CloudTech’s comments, describing Treasury’s draft digital asset legislation as a “pragmatic step forward towards allowing Australia to become an innovator and powerhouse in the global crypto market”.
This year, Crypto.com has held meetings across the country with senior members of the government and opposition, highlighting the benefits of utilising the AFSL regime as the basis of the regulatory framework, while also keeping the pressure on to introduce draft legislation by year-end.
“By leveraging the established AFSL regime, the legislation ensures a robust regulatory environment that protects consumers, without placing unnecessary red tape on market operators, something that Crypto.com has been advocating for throughout the year,” Talwar said.
BTC Markets also welcomed the Albanese government’s draft cryptocurrency regulation.
“The proposed approach strikes a pragmatic balance between protection and progress. Issuers and businesses using digital assets for non-financial purposes are not subject to unnecessary regulation, ensuring consumer risks are addressed without stifling innovation or growth,” a spokesperson said.
“BTC Markets welcomes the opportunity to contribute to the consultation process and support the development of a regulatory framework that empowers Australians to confidently engage in the digital asset economy.”
Meanwhile, cryptocurrency educator and investor advocate Sydel Sierra from Digital Wealth Group is urging ASIC not to overreach.
“Regulation is necessary but I’d hate to see the sector strangled by red tape. Investors also want to also retain custody of their own crypto, so I’m urging ASIC to be respectful of that,” Sierra said.
She hopes by forcing exchanges to hold an AFSL, deceptive and “cowboy” operators will be weeded out of the market.
“I expect this’ll open the boom gates to more everyday investors to start trading in digital assets.”
