In brief
ASIC has released important updates to its guidance in INFO 225 on the regulation of digital assets, including in relation to digital asset exchanges, digital wallets, tokenisation, and offshore digital asset businesses promoting, selling or providing services in relation to digital assets in Australia. The significance of these updates is that if a digital asset is a "financial product" the entity issuing, dealing in, advising on, or providing a custodial service in relation to (amongst other things) must hold an Australian financial services licence (AFSL) and otherwise comply with the conduct and disclosure obligations under Chapter 7 of the Corporations Act 2001 (Cth) subject to the exemptions. Further, digital asset exchanges trading digital assets characterised as financial products will need an Australian market licence subject to relevant exemptions, and depending on how transactions in digital assets that are financial products are cleared and/or settled a clearing and settlement (CS) facility licence may be required by the operator of such a facility.
Importantly, ASIC has issued a class no action letter indicating that it does not intend to take action against digital asset businesses that are in breach of the requirement to hold an AFSL, Australian market licence, or CS facility licence (subject to specific conditions) if that business has on or before 30 June 2026:
- Lodged with ASIC an application for an AFSL (including an application to vary the conditions on an existing AFSL) covering the provision of the financial services, notifies ASIC in writing of their intention to apply for an Australian market licence to allow the person to operate a financial market in relation to the digital assets and attends the requisite meeting, and/or notifies ASIC in writing of their intention to apply for an Australian CS facility licence and attends the requisite meeting (as applicable); or
- Notified ASIC in writing of their intention to cease to provide the financial services or cease to operate the financial market or clearing and settlement facility and comply with the stipulated content requirements for that written notice.
ASIC’s class no-action position does not apply in relation to:
- Crypto lending/earn products (facilities under which a person lends digital assets to others or pays a return to customers from the use of digital assets); or
- Non-cash payment facilities, other than stablecoins, where a digital asset is used to make a payment; or
- Derivatives (other than wrapped tokens) in relation to digital assets.