Australia's financial regulator is pushing for stricter rules on digital asset exchanges ahead of the licensing deadline.

The country's regulator, ASIC, has proposed tougher rules to protect users' digital assets, regulate crypto trading, and preserve the country's financial stability.

Australia's financial regulator has proposed new standards for digital currency exchanges and digital asset custodians, outlining how firms must protect customer funds, conduct transactions and meet financial requirements under rules that come into effect next year.

The Australian Securities and Investments Commission (ASIC) said it launched a consultation on Thursday on the rules, which will require affected companies to obtain or update their regulatory license or authorisation. The consultation closes on 27 November and final guidelines and standards are expected to be delivered in March 2027.

The proposals are the next step in Australia's efforts to bring crypto businesses under the same legal framework as traditional financial firms. Parliament passed the law in April, joining jurisdictions such as the European Union, Singapore and Hong Kong that have introduced dedicated crypto regulations.

Australia's move comes years after the 2022 FTX crash left around 30,000 Australian customers unable to access their money. Three years earlier, Cryptopia, an exchange in neighboring New Zealand, went bankrupt after a major hack.

These rules will take effect on April 8, 2027. Crypto companies already operating in the country have until October 7 next year to apply for a license and can continue to operate while ASIC reviews their applications.

For Australian investors, the changes mean clearer rules on how exchanges can hold their assets, execute orders and handle conflicts of interest. Crypto companies will face new compliance obligations and financial requirements to legally operate in the country.

ASIC Commissioner Alan Kirkland said: "Our approach is based on the principle of 'same activity, same risk, same regulatory outcome' to align Australia with that of similar jurisdictions overseas."

According to the consultation paper, platforms will be subject to standards covering the segregation and protection of client assets, trading transparency, settlement procedures and funding. The proposed trading rules also address market manipulation, conflicts of interest and how exchanges handle customer orders.

ASIC said it had received more than 140 applications from businesses seeking licenses to provide financial services linked to digital assets. It also said that stablecoins used for payments would be dealt with separately through Australian payment services reforms.

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