Consumer Protection for Crypto in Australia: What You Need to Know in 2025

When you buy Bitcoin or trade NFTs in Australia, you’re not protected like you would be if you bought shares or opened a bank account. That’s changing. As of late 2025, Australia is rolling out its strongest consumer protections for cryptocurrency yet - not by creating new rules from scratch, but by plugging crypto into the same legal framework that already guards your savings, your super, and your investments.

Why Australia Is Overhauling Crypto Rules

The 2022 collapse of FTX sent shockwaves through Australia’s crypto market. Thousands of local investors lost money overnight. Many had trusted platforms that looked legit - no red flags, clean websites, flashy ads. But behind the scenes, funds were misused, records were hidden, and there was no safety net. The government didn’t just sit back. It launched a two-year review called the "token mapping exercise," digging into how every type of digital asset was being used, sold, and abused.

The result? The Treasury Laws Amendment Bill 2025: Digital Asset and Tokenised Custody. This isn’t just another consultation paper. It’s the final draft, with public feedback closed in October 2025. The goal is simple: stop bad actors, protect everyday people, and give honest businesses a clear path to operate.

What’s New? Two New Licensed Platforms

Under the new law, all crypto platforms operating in Australia must now hold an Australian Financial Services Licence (AFSL). That’s the same license banks and brokers need. Two new categories are being created under the Corporations Act 2001:

• Digital Asset Platforms (DAP) - these are exchanges where you buy, sell, or trade crypto like Bitcoin, Ethereum, or stablecoins.
• Tokenised Custody Platforms (TCP) - these are services that hold your crypto for you, like a digital vault.

Together, they’re called "crypto platforms." If you run one, you’re now legally responsible for:

• Clear, honest advertising - no fake promises about returns
• Strong security and risk controls
• Conflict-of-interest policies
• Trained staff who understand what they’re selling
• Dispute resolution systems
• Compensation schemes if things go wrong

Fines for breaking these rules? Up to $16.5 million. That’s not a warning. That’s a deterrent.

What’s Still Excluded?

The law doesn’t aim to control every single crypto-related activity. It’s focused on platforms that handle money or assets for consumers. So:

• NFTs used inside games (like skins or characters) are out - as long as they’re not traded on open markets.
• Companies using tokens to run loyalty programs or internal systems aren’t covered.
• Individuals trading crypto peer-to-peer without a platform aren’t regulated.

The focus is on the middleman - the exchange, the wallet provider, the broker. That’s where most consumer harm happens.

Small Players Get a Pass - For Now

Not every tiny crypto service needs a license. If a platform only handles less than $5,000 per customer and under $10 million in total annual transactions, it’s exempt. This is meant to protect hobbyists, local traders, and small community projects from drowning in red tape.

But here’s the catch: even if you’re exempt, you still can’t lie to people. The Australian Consumer Law still applies. If you claim your token will "double in value in 30 days," you’re breaking the law - license or not.

What You Already Had to Do (And Still Do)

Even before this new law, crypto businesses had to follow rules. AUSTRAC, Australia’s financial intelligence unit, has required all digital currency exchanges to register since 2018. That means:

• You must verify your customer’s identity (KYC)
• You must monitor transactions for suspicious activity
• You must report anything that looks like money laundering or terrorism funding
• You must keep records for seven years

ASIC, the financial regulator, has also been cracking down on misleading ads. In 2024 alone, ASIC took action against seven crypto firms for fake celebrity endorsements, false return claims, and hiding fees. One company promised "10% weekly returns" - that’s illegal, even if the asset isn’t classified as a financial product.

How This Changes What You See Online

You’ll start seeing changes in how crypto is marketed:

• No more "Get rich quick with Solana!" banners on Instagram.
• No more influencers saying "I made $50k in a week" without clear disclaimers.
• No more hidden fees buried in 50-page terms.

Platforms will need to clearly state:

• What risks you’re taking
• How your assets are stored
• What happens if the platform fails
• Who to contact if something goes wrong

This isn’t just about honesty - it’s about giving you real information to make a choice.

Industry Support - Even With Higher Costs

Surprisingly, most big Australian crypto firms support the new rules. Independent Reserve, BTC Markets, and OKX Australia all publicly backed the draft bill. Why? Because they’re tired of being lumped in with scams.

Kate Cooper, CEO of OKX Australia, said it best: "This is the clearest signal yet that crypto is no longer operating on the fringes." She’s right. Legit businesses are tired of losing customers to shady operators who don’t follow any rules. The new law levels the playing field.

Liam Hennessy, a financial lawyer, called it "critical to the sector’s growth." He pointed out that the law doesn’t stifle innovation - it makes it sustainable. Investors won’t jump in if they think they could lose everything with no recourse.

What This Means for You as a Consumer

Here’s what you should do right now:

1. Check if your exchange is licensed - Look for the AFSL number on their website. If it’s not there, ask. If they can’t show it, walk away.
2. Read the fine print - Not just the marketing. Look for their risk disclosures, custody details, and dispute process.
3. Don’t trust hype - If it sounds too good to be true, it is. No one guarantees returns in crypto. Anyone who says otherwise is breaking the law.
4. Use only regulated custody services - If you’re holding more than a few hundred dollars, don’t leave it on an exchange. Use a licensed custody platform with insurance.
5. Report suspicious activity - If you see a platform making false claims, report it to ASIC or AUSTRAC. Your report could stop someone else from getting scammed.

What’s Next?

The law is final, but the timeline for full enforcement is still being worked out. Expect full compliance to kick in by mid-2026. Until then, regulators are ramping up audits and warning notices.

Australia isn’t trying to kill crypto. It’s trying to make it safe. The goal is to become a global leader in digital asset regulation - not by banning innovation, but by building trust. And trust is what keeps people investing, building, and growing.

If you’re holding crypto in Australia, this isn’t just another regulation. It’s your new safety net. Use it. Know your rights. Demand transparency. And don’t let anyone convince you that crypto is a wild west anymore - because now, it’s got rules.