Australia’s crypto licensing framework changed substantially in 2026. The country has expanded its AML/CTF regime from digital currency exchanges to a broader range of virtual asset service providers, while separate legislation will bring digital asset and tokenized custody platforms into the Australian financial services licensing framework from April 2027.
Crypto companies may therefore need to consider two regulatory layers: AUSTRAC registration for specified virtual asset services and ASIC licensing where the business provides financial services or operates a regulated digital asset platform.
Australia’s Dual-Regulator Model
AUSTRAC and the Australian Securities and Investments Commission regulate different aspects of crypto activity.
AUSTRAC supervises businesses under the Anti-Money Laundering and Counter-Terrorism Financing Act. Its responsibilities include registration, customer due diligence, transaction monitoring, regulatory reporting, sanctions controls, and transfer-of-value requirements.
ASIC administers the Corporations Act and Australia’s financial services licensing system. An Australian Financial Services Licence may be required when a digital asset, platform, wallet, stablecoin, or related service falls within the definition of a financial product or financial service.
AUSTRAC registration does not replace an AFSL. A company may require one authorization, both, or neither, depending on its activities and product structure.
From DCE Registration to the VASP Regime
On March 31, 2026, Australia replaced the previous Digital Currency Exchange terminology with the broader concepts of virtual assets and Virtual Asset Service Providers.
The expanded regime covers services such as:
- Exchanging virtual assets for fiat currency
- Exchanging one virtual asset for another
- Arranging virtual asset exchanges
- Safekeeping virtual assets or private keys
- Accepting instructions to transfer virtual assets
- Making transferred virtual assets available to recipients
The rules can also capture intermediaries that arrange exchanges without providing every part of the transaction themselves. A peer-to-peer platform, broker, or executing intermediary may therefore fall within the regime even when it does not act as the direct counterparty.
Providers of software or technical infrastructure may remain outside the registration requirement where they do not control customer assets, private keys, or transactions. Each operating model should be assessed according to the services performed and the level of control exercised.
AUSTRAC Transition Period in 2026
The transition depends on whether the company was already registered as a Digital Currency Exchange before March 31, 2026.
Existing DCE providers were automatically registered as VASPs when the reforms commenced. They do not need to submit a new registration application solely because of the terminology change. However, they must update their registration details and designated services by July 29, 2026.
Businesses that provide newly regulated virtual asset services must apply for AUSTRAC enrolment and VASP registration by July 29, 2026. If an eligible provider applies before that deadline, it may continue providing the newly regulated services while AUSTRAC considers the application.
A company that has not previously provided the relevant services cannot rely on the transition period to launch before approval. New entrants generally must obtain registration before commencing regulated virtual asset activities.
AUSTRAC Registration Requirements
An AUSTRAC application requires more than incorporating an Australian company. The applicant must demonstrate that its ownership, management, compliance systems, and operating model are suitable for the proposed activities.
The registration process commonly covers:
- Australian company and business details
- Directors, beneficial owners, and senior managers
- The services provided and intended customer groups
- Countries involved in the company’s transactions
- Delivery channels and transaction volumes
- AML/CTF risk assessment and compliance controls
- Details of the AML/CTF compliance officer
- Police checks and fit-and-proper information
- Transaction monitoring and regulatory reporting arrangements
Australian proprietary companies must have at least one director who ordinarily resides in Australia. The company must also maintain an Australian registered office.
AUSTRAC does not impose a general fixed minimum capital requirement for VASP registration. Capital requirements may arise separately under the AFSL regime or from banking, custody, operational, or counterparty arrangements.
When an AFSL May Be Required
Some crypto businesses may already require an AFSL under the existing Corporations Act. The regulatory treatment depends on the legal rights, functions, and economic characteristics of the product rather than the terminology used by the issuer.
ASIC guidance identifies several structures that may qualify as financial products, including certain:
- Stablecoins
- Wrapped tokens
- Tokenized securities
- Digital asset wallets
- Staking arrangements
- Managed investment schemes
- Non-cash payment facilities
- Crypto lending and yield products
- Derivatives linked to digital assets
A platform dealing in these products may require an AFSL or a variation of its existing authorizations. Market or clearing and settlement facility licensing may also apply in some cases.
ASIC’s no-action position gives qualifying digital asset businesses additional time to assess their licensing obligations. The position was initially due to end on June 30, 2026 but was subsequently extended to September 30, 2026.
The relief is conditional and does not cover every crypto business or product. Crypto lending and earn products, most crypto derivatives, and certain non-cash payment facilities are excluded. Companies should not assume that the no-action position automatically permits unlicensed activity.
Digital Asset Platforms and Tokenized Custody Platforms
The Corporations Amendment (Digital Assets Framework) Act 2026 introduces two new financial products:
- Digital Asset Platforms
- Tokenised Custody Platforms
The Act received Royal Assent on April 8, 2026 and is scheduled to commence on April 9, 2027. Under the new regime, operators of covered platforms will generally need an AFSL with appropriate authorizations.
Licensed operators will be subject to requirements relating to:
- Governance and risk management
- Customer asset holding
- Transaction and settlement standards
- Financial resources
- Disclosure and transparency
- Dispute resolution
- Compensation arrangements
- Efficient, honest, and fair service provision
A small-scale exemption applies where the platform holds less than AUD 5,000 per customer and facilitates less than AUD 10 million in transactions over a 12-month period. Both conditions must be considered when determining whether the exemption is available.
ASIC is developing regulatory guidance and operational standards before the regime commences. Application arrangements and transitional relief are expected to be introduced as part of the implementation process.
AML/CTF Program and Ongoing Compliance
Registered VASPs must maintain an AML/CTF program based on their business risks. The framework should address:
- Customer identification and verification
- Beneficial ownership checks
- Enhanced due diligence
- Transaction monitoring
- Suspicious matter reporting
- Sanctions screening
- Transfer-of-value information
- Record keeping
- Staff training
- Independent evaluation
- Governance and compliance officer oversight
Compliance documents should reflect the company’s actual products, transaction flows, customer types, delivery channels, and geographic exposure. Generic policies that do not match the operating model are unlikely to provide an adequate compliance framework.
Buying an Existing AUSTRAC-Registered Company
Acquiring an existing Australian VASP may shorten the setup process, but registration does not transfer independently from the legal entity.
A buyer should review:
- Current AUSTRAC registration status
- Registered virtual asset services
- Previous regulatory filings
- AML/CTF program and risk assessment
- Compliance history and outstanding remediation
- Directors and beneficial owners
- Banking and payment arrangements
- Customer liabilities and operational history
Changes in ownership, management, services, and risk exposure may need to be reported to AUSTRAC. Banking relationships and third-party agreements may also be subject to separate approval or review.
Conclusion
Australia’s crypto regulatory framework now consists of several connected regimes. AUSTRAC registration applies to specified virtual asset services, existing financial services laws may already require an AFSL for certain digital asset products, and the Digital Assets Framework will introduce a dedicated licensing regime for DAPs and TCPs from April 2027.
Crypto businesses should first classify their products and services, determine whether they fall within the expanded VASP regime, and assess any current or future AFSL requirements. Existing DCEs and newly regulated providers should also ensure that the July 29, 2026 AUSTRAC deadline is addressed.
Need Help with Australian Crypto Licensing?
Equilex assists crypto businesses with AUSTRAC registration, AFSL regulatory mapping, AML/CTF documentation, Australian company structuring, and the acquisition of existing regulated entities. Submit an inquiry through the website, and an Equilex specialist will contact you within 24 hours.
