ASIC issues long awaited guidance on digital assets and transitional relief for existing providers
In case you missed it, the Australian Securities and Investments Commission (ASIC) released its updated version of Information Sheet 225 - Digital assets: Financial products and services (INFO 225), which set out its views on when certain digital asset products and services are regulated under Australian financial services (AFS) laws. ASIC's update represents its interpretation of the existing law and not a change to the law.
This comes after ASIC released a consultation paper titled Consultation Paper 381 - Updates to INFO 225: Digital assets: Financial products and services (CP 381) in December last year, which set out its proposal to clarify its interpretation of how AFS laws apply to crypto and digital assets. For further background on the consultation paper, see our article, ASIC releases much anticipated consultation paper to update Information Sheet 225 on crypto-assets.
Need to know
- Dealers in digital assets will need to take action to confirm whether their business will be regulated under AFS laws, and if so, ensure they obtain an appropriate AFS licence or are authorised under as a corporate authorised representative (CAR) of an AFS licensee.
- Only a certain type of digital assets, such as Bitcoin, Gaming NFTs and Membership NFTs are unlikely to be financial products.
- ASIC has issued a no-action position for a contravention of, among other things, the requirement to hold an AFS licence for the provision of financial services in relation to digital assets that are financial products where, among other things, the person has lodged with ASIC an AFS licence application on or before 30 June 2026.
- ASIC has proposed to provide specific relief for distributors of certain stablecoins and wrapped tokens, subject to those digital assets meeting certain eligibility requirements, which we have set out in greater detail below. ASIC invites feedback on this proposed relief until 12 November 2025.
Digital assets as financial products - what has changed?
As highlighted in CP 381, ASIC set out its view on the types of digital assets that it considered financial products.
ASIC reiterated its approach that each digital asset will need to be assessed on an individual basis to ascertain whether it is a financial product and attracts licensing obligations.
ASIC has now updated INFO 225 with 18 worked examples (an increase from 13 in CP 381) to help businesses assess whether the digital assets they deal in are a financial product. These examples are grouped into various categories of financial products, including:
- a facility for making a financial investment;
- an interest in a managed investment scheme (scheme);
- a security (ie a share or a debenture);
- a derivative; and
- a non-cash payment facility.
We have summarised these worked examples in the below table:
| Type of token | Type of financial product |
|---|---|
Exchange in-house token Where funds raised will be used to develop the exchange and the token price changes based on perceived success of the exchange. | Likely to be a facility for making a financial investment |
Basic proof-of stake systems Where individuals independently interact with a company's blockchain's automatic staking arrangement by contributing and locking up tokens, securing the network and validating transactions for the blockchain. Individuals earn a reward for their staking effort, which is paid out in the blockchain's native tokens. | Unlikely to be a financial product |
Managed staking and staking as a service Aggregation of customer digital assets to stake. Company takes a fee for the services. | Facility for making a financial investment or a managed investment scheme Exception: not a financial product where there are no rights or benefits produced by the company's service that are in addition or different to the underlying staking arrangement |
Gaming non-fungible tokens (NFTs) Sold or received and tradeable on secondary markets. No representation in white paper or marketing materials that the contribution used to buy the NFTs will be used to generate a financial return, or other benefit (other than the utility of playing the game) or that the NFTs should be bought because of an expectation that the prices will increase. | Unlikely to be a financial product |
Bitcoin No promise or representation that contributions will be used to generate returns for investors. | Unlikely to be a financial product |
Yield bearing stablecoins Expected to maintain a stable price and value. The issuer uses the funds raised from the sale of the tokens to invest in low-risk assets which are held on trust. Existing token holders are issued new tokens based on the returns generated from the trust assets. | Likely to be a managed investment scheme |
Gold-linked tokens Money raised from token sales is pooled. Gold and gold-related futures and options are acquired by the issuer and held on trust. Each token represents an interest in the trust. | Likely to be a managed investment scheme Exception: not a financial product if tokens are issued that are numbered and correspond to a specific allocation of physical gold. It is a bailment and safekeeping arrangement. Token holders only have an interest in the gold directly corresponding with their tokens. |
Membership NFTs Giving members access to events and discounts and no financial benefits or rights or interests in property. | Unlikely to be a financial product |
Tokenised real estate Fractionalised real estate investment where tokens represent a part interest in an apartment building which the investor funds are used to purchase. Token value relates to the market value of the investment property. | Likely to be a managed investment scheme |
Pre-paid services tokens Tradable and redeemable for services. | Unlikely to be a financial product |
Blockchain launch Initial fundraising for development of a new blockchain via the presale of tokens | Likely to be a managed investment scheme |
Meme coin Proceeds not used in a business and no right given to holders. | Unlikely to be a financial product |
| Tokenised concert ticket | Unlikely to be a financial product |
Tokenised bond Tokenisation means the blockchain records the holding of the bond and the bonds have the typical features of a traditional bond - the tokenisation does not result in fractionalisation of the bonds. | Likely to be a debenture, and therefore a security |
Traditional derivative Contract for difference over digital assets | Likely to be a derivative |
Wrapped token The value of the token is ultimately determined, derived from or varied by reference to another digital asset | Likely to be a derivative |
Digital asset wallet Scenario 1: Allows a customer to instruct issuer, who controls the private keys, to transfer their token to another address or digital asset wallet issued by the issuer. The service can also be used to transfer the token to any other address or digital asset wallet that accepts these tokens. Issuer markets this service as a convenient way for its clients to make payments to third parties. |
Scenario 1: likely to be a non-cash payment facility
|
| Scenario 2: Allows customer to create blockchain address and private keys themselves, and to transfer tokens and make payments to other digital asset wallets held by themselves or other persons. Issuer does not market the wallet as a facility capable of making payments. Issuer has no access to the customer's private keys and cannot initiate payments on a client's behalf. | Scenario 2: the component of the wallet that can be used to make non-cash payments may be a non-cash payment facility |
Non-interest-bearing stablecoin Linked to a single currency and redeemable from the issuer at any time by any holder. No yields generated from the issuers dealings in the funds are passed on to the clients. Issuer markets the stablecoin as a form of digital cash. Merchants accept transfer of the stablecoin into their digital asset wallet as an effective means of payment. | Likely to be a non-cash payment facility |
ASIC’s transitional relief
ASIC has issued a no-action position until 30 June 2026, confirming that it will not take enforcement action against businesses that fail to hold an AFS licence or Australian market licence (AML) or Australian clearing and settlement facility licence (ACSFL) for the provision of relevant services in relation to digital assets that are financial products.
To rely on this licensing relief, ASIC has outlined that persons will need to:
- in the context of the requirement to hold an AFS licence, on or before 30 June 2026, lodge with ASIC an application for (or variation of) an AFS licence;
- in the context of the requirement to hold an AML or ACSFL:
- on or before 30 June 2026, notify ASIC of their intention to apply for (or vary) an AML or ACSFL, and attend a pre-meeting with ASIC in relation to the proposed application;
- within 12 months of the above notification, lodge the relevant application; and
- in the context of the requirement to hold either of the three relevant licenses, ensure that the provision of the financial service, operation of the financial market, or operation of the clearing and settlement facility occurred on or after 29 October 2025 and on or before one of the following circumstances occurring:
- ASIC notifying the person in writing that ASIC refuses to receive the relevant application;
- the person withdrawing the application;
- ASIC refusing to grant the person the relevant licence (or variation); and
- ASIC granting the person the license (or variation).
ASIC has also confirmed that it has taken a no-action position where any of the above-contemplated contraventions occur on or after 29 October 2025 and where, broadly, on or before 30 June 2026, the person has notified ASIC that it intends to cease provision of the financial service, operation of the financial market, or operation of the clearing and settlement facility, in accordance with ASIC's requirements.
In that context, we note that ASIC's class no-action positions do not apply in relation to:
- crypto lending/earn products (facilities under which a person lends digital assets to others or pays a return to customers from the use of digital assets); or
- non-cash payment facilities, other than stablecoins, where a digital asset is used to make a payment; or
- derivatives (other than wrapped tokens) in relation to digital assets.
Stablecoins, wrapped tokens and omnibus accounts
ASIC has also proposed to provide specific relief for distributors of certain stablecoins and wrapped tokens, and certain relief for custodians of digital assets that are financial products (to allow digital assets to be held in omnibus accounts).
Stablecoins & wrapped tokens
The relief relevant to distributors of stablecoins and wrapped tokens is proposed to be contained in Corporations (Stablecoin and Wrapped Token Relief) Instrument 2025/XXX' (Instrument).
In that context, ASIC has released Simple consultation - 32: Proposed relief for certain stablecoins and wrapped tokens, and extension of omnibus accounts for digital asset custody (SC 32) and invites feedback on the draft instruments until 12 November 2025.
Under the Instrument, ASIC proposes to provide class relief for intermediaries engaging in secondary distribution of eligible stablecoins and eligible wrapped tokens issued by an AFS licensed issuer.
The relief exempts intermediaries from the requirement to hold separate AFS licenses, AMLs, or ACSFLs when providing services related to eligible stablecoins or eligible wrapped tokens.
The Instrument only applies to a limited class of stablecoins and a limited class of wrapped tokens that satisfy the following criteria:
Eligible stablecoins
- issued by a person that is appropriately licensed to issue the stablecoin (or is an 'exempt foreign issuer' - see below);
- each holder in the class broadly has the right to redeem the stablecoin;
- the terms and conditions of (or disclosure document for) the stablecoin contain specific provisions as set out in the Instrument; and
- other than the redemption right, holders have no right to, and do not receive a financial return or other financial benefit from, the reserves.
Eligible wrapped tokens
- issued by a person that is appropriately licensed to issue the tokens (or is an 'exempt foreign issuer' - see below);
- confers on the third-party holder a redemption right to terminate the arrangement and be transferred another digital asset that the digital asset references (ie the underlying asset);
- the terms and conditions of (or disclosure document for) the token contain specific provisions as set out in the Instrument;
- the underlying asset is either not a financial product or a financial product that is an eligible stablecoin or eligible wrapped token; and
- other than the redemption right, holders have no right to, and do not receive a financial return or other financial benefit from, the reserves.
The Instrument otherwise clarifies that certain issuers are 'exempt foreign issuers', meaning they are exempt from the requirement to hold an AFS licence to issue the relevant digital asset because the issuer does not carry on a financial services business in Australia in relation to the issue of the digital asset.
Omnibus relief
The relief relevant to holding digital assets in an omnibus account is proposed to be contained in ASIC Corporations (Amendment) Instrument 2025/XXX (ASIC Custody Amendment Instrument)
ASIC Instrument 2024/17 allows for a person holding financial products when providing a custodial or depository service to provide custody of certain types of financial products in omnibus accounts for their customers, subject to certain conditions.
ASIC Custody Amendment Instrument extends the omnibus account exemption for digital assets that are financial products, subject to maintaining appropriate record-keeping arrangements and reconciliation procedures.
What’s next?
The release of INFO 225 marks a significant milestone in ASIC’s regulation of digital assets. Businesses that deal in digital assets should, with urgency, take steps to understand the impacts of this guidance on their operations and assess whether their business is likely to attract AFS licensing obligations.
That’s where we can help. To discuss next steps for your business, please contact John Bassilios or another member of our specialist digital assets and financial services regulation team.
This article was written with assistance by Annabelle Duke, Law Graduate.
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