Quick Breakdown
- The Treasury’s new Digital Asset Bill faces criticism for blurring lines between securities and commodities like Bitcoin.
- Critics warn the Bill grants ASIC powers beyond its legal remit under the Corporations Act.
- Industry voices argue the move could stifle innovation and push smaller Bitcoin-only platforms out of the market.
The Australian Treasury is facing mounting criticism from crypto industry stakeholders over its proposed Treasury Laws Amendment (Digital Asset and Tokenized Custody Platforms) Bill 2025 (Exposure Draft). The bill, aimed at tightening regulation around digital asset platforms, has been accused of overstepping legal boundaries and redefining the role of the Australian Securities and Investments Commission (ASIC).
The Treasury’s proposed Digital Asset and Tokenised Custody Platforms Bill extends AFSL-level obligations into a new market that deliberately ignores the fundamental differences between securities, managed investments, and commodity-like assets such as Bitcoin.
Its sweeping…
— Australian Bitcoin Industry Body (@AusBTCIndBody) October 27, 2025
Industry warns of overreach
According to industry experts, the bill’s broad definition of a “digital asset platform” blurs the lines between financial products and commodity-like assets such as Bitcoin. Under the proposed framework, both decentralized digital assets and speculative tokens would fall under ASIC’s oversight — a move critics say transforms the securities regulator into a commodities regulator.
Currently, ASIC’s powers are confined to financial products and services under the Corporations Act 2001 (Cth) and the ASIC Act 2001 (Cth). Commodities such as gold, silver, and other tangible goods are regulated through general commercial and consumer laws unless converted into financial instruments like ETFs or futures. The bill’s language, however, captures any system facilitating the custody or exchange of digital tokens — effectively classifying Bitcoin alongside speculative assets.
“This is a structural redefinition of ASIC’s jurisdiction,”
one submission to Parliament warned.
“It extends the regulator’s authority into property and commodity law — something Parliament never intended.”
Bitcoin exchanges at risk
The Treasury has defended the proposal as a necessary safeguard following the collapse of FTX. However, critics argue that FTX’s downfall stemmed from fraud, not a lack of classification or licensing. They note that similar collapses have occurred within ASIC’s current regulatory scope, such as the ASIC-licensed Shield Master Fund.
Opponents caution that the bill could drive smaller, Bitcoin-only exchanges out of the market while consolidating power among large, multi-asset trading platforms backed by banks and institutional players. Such a shift, they warn, could heighten systemic risks rather than reduce them.
Notably, the government is preparing to grant AUSTRAC (the Australian Transaction Reports and Analysis Centre) expanded powers to monitor and regulate crypto ATMs, as Australia now ranks as the third-largest crypto ATM market globally.
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