Binance can be used legally in Australia in 2026, but its regulatory position is narrower than it once was. Australian users trade through Binance Australia, operated by InvestbyBit Pty Ltd and registered with AUSTRAC — since March 31, 2026, as a Virtual Asset Service Provider (VASP) rather than under the former Digital Currency Exchange (DCE) category. Derivatives, however, remain off-limits to retail clients: ASIC cancelled the AFS licence covering Binance's Australian derivatives business back in 2023, and a March 2026 Federal Court penalty confirmed why.
Binance's case is a useful lens for the wider 2026 shift in how Australia regulates digital asset platforms — a shift that affects every exchange operating in or serving the Australian market, not just Binance.
From DCE to VASP: What Changed on March 31, 2026
Since 2018, businesses exchanging digital currency for fiat and back had to register with AUSTRAC as a Digital Currency Exchange. That category no longer exists. Under AUSTRAC's AML/CTF Amendment Act reforms, which commenced March 31, 2026, the DCE category was replaced by the broader Virtual Asset Service Provider (VASP) registration, and the statutory vocabulary changed accordingly — "digital currency" became "virtual asset," and "digital currency exchange" became "virtual asset service provider."
The scope expanded at the same time. Where DCE registration covered only fiat-to-crypto exchange, VASP registration also captures crypto-to-crypto exchange, custodial wallet services, and virtual asset transfers — activities that previously sat outside AUSTRAC's registration requirement entirely.
Existing DCE providers, including Binance's Australian operation, were automatically carried over to VASP status on March 31, 2026, without needing to submit a new registration. That transition was administrative, not optional: registered entities still had to update their enrolment details in AUSTRAC Online between March 31 and July 29, 2026 to specify which virtual asset services they provide or intend to provide. New ongoing customer due diligence obligations, along with a new AUD 5,000 threshold for certain gambling-related services, also applied from March 31, 2026. Businesses that started providing VASP services on or after that date, rather than transitioning from an existing DCE registration, had a separate 28-day window to enrol.
The Digital Assets Framework Act: A Separate, Larger Change
Running in parallel to the AUSTRAC reforms, Australia passed the Corporations Amendment (Digital Assets Framework) Act 2026 (the DAF Act) through Parliament on April 1, 2026. It received Royal Assent on April 8, 2026.
The DAF Act does something AUSTRAC's reforms don't: it brings digital asset platforms into the Corporations Act as financial products. The Act creates two new regulated categories — Digital Asset Platforms (DAPs), where an operator holds digital tokens for itself or on behalf of clients, and Tokenised Custody Platforms (TCPs). Operators of either will need an Australian Financial Services Licence (AFSL) from ASIC, the same licence that already governs traditional brokers, fund managers, and custodians, unless a narrow exemption applies — currently set at platforms with total transaction value under AUD 10 million across a rolling 12-month period.
The DAF Act itself does not commence until April 9, 2027, 18 months after Royal Assent, with a further six-month transition period after that during which existing operators can keep running while an AFSL application is assessed. This is a long runway by design, and it should not be confused with the more immediate deadline that follows.
ASIC's June 30, 2026 Deadline: Why It Mattered Sooner
Separately from the DAF Act's 2027 commencement, ASIC had already been applying existing financial-services law to certain digital asset products under its Information Sheet 225 (INFO 225) guidance, updated in 2025 to clarify that stablecoins, wrapped tokens, tokenised securities, and digital asset wallets can already qualify as financial products under current law — before the DAF Act's new categories even take effect.
To manage the transition, ASIC granted a sector-wide "no-action" position, effectively allowing platforms operating without a licence to continue while they sorted out their AFSL status. That no-action position expired June 30, 2026. Providers offering financial services involving digital asset financial products had to apply for an AFS licence, or a variation to an existing one, by that date to stay protected while ASIC processed the application. Businesses that didn't apply in time lost that protection and were exposed to enforcement for unlicensed conduct — a breach that carries civil and criminal penalties, including fines that can reach 10% of annual turnover.
For exchanges and platforms operating in Australia, this meant June 30, 2026 was the real pressure point in 2026, well ahead of the DAF Act's eventual 2027 commencement. Any platform offering products caught by the existing INFO 225 interpretation — not just those that will fall under the new DAP/TCP categories later — needed to have a licence application in before that date.
Why Binance's Derivatives Business Is a Cautionary Example
Binance's own history illustrates what happens when that licensing line isn't respected. In December 2022, ASIC began a targeted review of the AFS licence held by Oztures Trading Pty Ltd, trading as Binance Australia Derivatives, focused on how the business classified its clients. ASIC found that Binance had misclassified the large majority of its Australian client base as wholesale investors — clients who don't receive the disclosure documents, dispute-resolution access, and target market determinations that retail clients are entitled to under Australian financial services law.
ASIC cancelled the AFS licence on April 6, 2023. Clients could no longer open or increase derivatives positions from April 14, 2023, and had to close any remaining positions by April 21, 2023. The matter didn't end there: in March 2026, the Federal Court ordered Binance Australia Derivatives to pay a AUD 10 million penalty, on top of roughly AUD 13.1 million already paid in client compensation in 2023. The court found that over 85% of Binance's Australian retail client base — 524 investors — had been improperly classified as wholesale over a nine-month period, resulting in more than AUD 12 million in trading losses and fees.
Binance Australia today operates spot trading and staking under its AUSTRAC VASP registration. Retail access to crypto derivatives has not been restored, and Binance's case remains one of ASIC's clearest examples of what misclassifying clients under Australian financial services law can cost.
What This Means for Other Exchanges in 2026
Binance's situation shows the two regulatory tracks operating side by side: AUSTRAC oversight of AML/CTF obligations under VASP registration, and ASIC oversight of anything that qualifies as a financial product under the Corporations Act. Holding one does not substitute for the other, and an exchange can be fully compliant on the AUSTRAC side while still facing enforcement risk on the ASIC side if it offers derivatives, certain stablecoins, or other products caught by INFO 225.
For exchanges and platforms serving Australian clients, the practical checklist for the rest of 2026 includes confirming VASP registration is current and reflects the specific virtual asset services actually offered, reviewing whether any product offered — derivatives, stablecoins, wrapped tokens, tokenised securities, or wallet services — falls within ASIC's existing INFO 225 interpretation of a financial product, and if so, ensuring an AFS licence application or variation was lodged before the June 30, 2026 deadline, and beginning to plan for the DAF Act's DAP/TCP categories ahead of the April 2027 commencement, even though that date still allows time to prepare.
For a detailed breakdown of the dual-regulator model and what the 2026 AML/CTF changes require in practice, see our guide AFSL Holders: Get Ready for Significant Changes in AML/CTF Compliance by 2026. Companies evaluating their own AUSTRAC registration or transition from DCE to VASP status can review our AUSTRAC DCE/VASP registration service for the current requirements and process.
Need help with licensing?
Equilex supports crypto exchanges and digital asset businesses with AUSTRAC VASP registration, AFSL applications and variations, and compliance structuring under Australia's evolving dual-regulator framework. Complete the contact form on our website, and a regulatory specialist will respond within 24 hours.
