ASIC today released Consultation paper 381 Updates to INFO 225: Digital Assets: Financial Products and Services (CP 381) outlining proposals to update Information Sheet 225 Crypto Assets (INFO 225).
To provide greater clarity about the current law, ASIC has proposed a range of updates to INFO 225, including adding 13 practical examples of how the current financial product definitions apply to digital assets and related products.
ASIC Commissioner Alan Kirkland said, 'We want to promote the growth of responsible financial innovation while ensuring consumer protection. A well-regulated financial system benefits everyone in the community as it supports consumer confidence, market integrity and facilitates competition and innovation.
'Australia's financial services regulatory regime is broad and technology neutral. Many digital assets and related products are financial products under the current law. Stakeholders have been calling for greater clarity and in response, we are releasing our draft updated guidance.
'We encourage all stakeholders to engage with the consultation process. We recognise that industry will need some time to consider and act on our updated guidance, so we are also consulting on a proposed transitional approach.'
Generally, ASIC's existing approach to financial services licences will apply to digital assets. For example, whether an applicant is proposing to deal in traditional securities or securities based on a digital asset platform, the same licensing regime applies.
CP 381 seeks feedback on:
- ASIC's updated guidance in INFO 225, including the worked examples,
- the application of the existing Australian Financial Services (AFS) licence processes, ASIC guidance and standard conditions to digital asset businesses,
- practical licensing issues for wrapped tokens and 'stablecoins', issues arising from the potential transition to the Government's proposed digital asset platform and payment stablecoins regimes, and consideration of potential regulatory relief, and
- a potential class 'no action' position for digital asset businesses that are in the process of applying for or varying an AFS licence, Australian Markets Licence or Clearing and Settlement Facility licence.
ASIC seeks the feedback on the proposed updated INFO 225 and the issues raised in CP 381 by 5pm on 28 February 2025. Details on responding can be found in the consultation paper.
ASIC intends to publish a final version of the updated INFO 225 in mid-2025, after considering feedback received through the consultation process.
ASIC will continue to use its full range of regulatory and enforcement tools, such as guidance, licensing, compliance and enforcement action, to protect consumers and uphold market integrity in the digital asset sector.
