Updated cryptocurrency legislation introduced: what’s changed in the November 2025 amendments?

One of the most significant reforms proposed by the draft legislation was the requirement for digital asset wallet providers and exchange operators who hold clients' tokens custodially to obtain an Australian Financial Services Licence (AFSL).

This licensing obligation was tempered with several proposed exemptions in the draft legislation, including an exemption relating to the 'staking' of digital assets.

The DAF Bill proposes a new definition of 'custodial staking arrangement' into the Corporations Act as follows:

• custodial staking arrangement
  • 'a custodial staking arrangement, for a digital asset platform or a tokenised custody platform, is an arrangement that is entered into by both the operator of the platform and a beneficiary under the platform (whether directly or through a nominee), and is entered into through the facility that constitutes the platform'^[1]

In doing so, the DAF Bill clarifies that:

• non-custodial staking remains completely outside any licensing requirements; and
• a 'custodial staking arrangement,' is not a managed investment scheme (MIS) and is to be regulated via a digital asset platform (DAP) or tokenised customed platform (TCP) operated by an AFSL holder.

The DAF Bill provides further guidance on the regulatory status of 'wrapped' tokens, introducing a new definition as follows:

• wrapped token
  • 'Wrapped tokens are defined as digital tokens, possession of which confers a right (defined as the 'redemption right') to redeem, or direct the delivery of, specific things defined as 'related assets'^[2]

Notably, the DAF Bill states that the redemption right attached to a 'wrapped' token is disregarded in determining whether a 'wrapped' token or the rights attached to it can be considered a financial product (Disregarding Rule).

The disregarding rule does not apply where:

• regulations specify otherwise; or
• the related asset is a financial product and the holder lacks equivalent rights or interests.

As such, 'wrapped' tokens will not, for example, be treated as derivatives or managed investments schemes solely on the basis of containing a redemption feature.

The DAF Bill clarifies that the exemption for ‘wrapped’ tokens extends to instances where related assets fall within section 765E(1) of the Corporations Act, as follows:

• underlying assets of a tokenised custody platform;
• digital tokens held through decentralised wrapping software or public digital token infrastructure; or
• assets or tokens prescribed by regulation

Additionally, the DAF Bill retains the draft legislation’s proposed exemption for public digital token infrastructure, such that for example, Bitcoin and Ethereum, would not be treated as financial products, MIS, or clearing and settlement facilities.

The earlier two-stage transition proposed in the draft legislation has been replaced with a single six-month transition period in the DAF Bill. 

As it stands, if a responsible person applies for an AFSL or a variation to an AFSL during the six-month transition period, the obligations outlined in the DAF Bill are now deferred only until ASIC’s decision rather than for a full second 12-month window.

Whilst the DAF Bill does include a regulation-making power which permits modifications to this new transitional arrangement, it appears likely that obligations stemming from the DAF Bill will commence sooner rather than later.

Finally, the DAF Bill clarifies that whilst operators of DAP’s or TCP’s may appoint agents to do anything they are authorised to do in connection with the platform, liability always rests with the operator, reinforcing investor protection.

This includes actions related to:

• whether there is a liability to a client under the platform;
• whether the Act has been complied with for the platform;
• whether the platform rules, as discussed below, of the platform have been complied with; or
• whether the asset-holding standards or the transactional and settlement standards, as discussed below, have been complied with for the platform.