Australia is seeking public feedback on regulations for crypto platforms, with implementation planned for 2027.

Following the passage of digital asset legislation by parliament in April this year, Australia's securities regulatory agency is now proposing guidelines regarding capital requirements, custody, and trading standards for crypto platforms.

The Australian securities regulator launched a public consultation on Thursday to gather feedback on the proposed capital, custody, and trading requirements for crypto platforms. Previously, in April of this year, the Australian Parliament passed relevant legislation that expanded the regulatory coverage of this industry.

The proposed scheme includes three optional capital models, restricts the platform to trading on proprietary accounts, and requires quarterly reports on the status of wallets holding customer assets. The Australian Securities and Investments Commission (ASIC) also suggests allowing offshore custody, while seeking opinions on the following issue: what safeguards should be put in place in case the overseas parent company or affiliated companies go bankrupt.

ASIC Commissioner Alan Kirkland stated: "The guidelines and standards we propose recognize that digital assets and tokenization are playing an increasingly important role, including in the traditional areas of the financial system."

The proposed guidelines and standards will provide crypto operators with a clearer understanding of the regulations they need to comply with in order to obtain licenses under the new framework, protect customer assets, and meet financial requirements. This consultation follows the passage of the 'Company Law Amendment (Digital Assets Framework) Act' by parliament earlier this year.

The CEO of the Australian Digital Economy Commission, Amy - Rose Goodey, said about Cointelegraph: “The release of CP 392 by ASIC is an important milestone for Australia’s digital asset industry. After years of communication surrounding regulatory reforms, it is encouraging to see that the focus has shifted to actual implementation.”

OKX Australia CEO Shange Chandra also welcomed these proposals, stating that they could potentially drive industry consolidation.

He said about Cointelegraph: "The rigor of these standards is appropriate. They will reward those operators who have already made investments in compliance, capital, and custody, and they will also test those operators who have not made such investments at all."

Capital, custody, and trading rules become the focus

ASIC is currently weighing three alternative capital models, one of which requires that operators who do not adopt a qualified third-party custody arrangement must hold either at least A$14 million (US$9.7 million) in tangible net assets or 10% of their average income, whichever is higher.

Goodey indicates: "We will work closely with members to thoroughly study these three proposed capital models, particularly their suitability for businesses of different sizes, as well as the concession arrangements that can be obtained through third-party custody."

Chandra states: "In our view, when clients entrust their assets to you, investing such a level of resources and maintaining such a degree of prudence should not in any way be a subject of dispute."

Regulatory authorities have also proposed to allow offshore custody and are seeking public feedback on whether Australian operators should have emergency access to private keys in the event that overseas parent companies or affiliated companies go bankrupt.

Goodey indicates that it is also important not to mandate domestic custody, as this acknowledges the global nature of the digital asset market.

Operators are also required to report the structure and addresses of the managed wallets to ASIC on a quarterly basis, and to keep the relevant records for seven years.

Thomsons Partner Liam Hennessy stated that this report proposal partially reflects Australia's dependence on offshore infrastructure – due to global competition, digital assets are typically stored overseas.

ASIC also proposed to restrict platform transactions to proprietary accounts, as well as to limit the acceptance of benefits in favor of specific tokens, in order to address potential conflicts of interest. Hennessy stated that this may test the existing trading model.

He said, "According to the proposal of ASIC, order-matching DAP (that is, platforms that aggregate customer orders through order books or matching mechanisms) shall not trade on their own platforms in a proprietary capacity, nor shall their affiliated legal entities trade through such platforms in a proprietary capacity. There are exceptions for specific scenarios. Groups that rely on affiliated market makers should pay particular attention to this point."

This consultation is part of the 18-month implementation roadmap for ASIC. The roadmap was announced after the Digital Assets Framework Act was passed in April.

The feedback deadline is November 27th. ASIC plans to release the final standards and guidelines in March 2027. The law is set to take effect on April 8, 2027, and operators must apply for the relevant licenses by October 7, 2027. They can continue operating during the review period of their applications by ASIC.