CP 381 Updates to INFO 225: Digital assets: Financial products and services

Released 4 December 2024. Comments closed 28 February 2025.

This consultation paper is about ASIC’s guidance on digital assets and related products.

It sets out our proposals to update Information Sheet 225 Crypto-assets (INFO 225) to provide further guidance about our interpretation of how the Corporations Act 2001 applies to crypto- and digital assets. It also sets out our proposals for licensing entities that provide financial services in relation to crypto- and digital assets that are financial products.

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Summary of feedback themes

In Consultation Paper 381 we asked for feedback on our proposed updates to INFO 225. Our summary of the key themes that emerged from feedback is set out below with a list of the 51 non-confidential respondents.

Temporary relief for intermediaries in relation to stablecoins and wrapped tokens is appropriate

Most respondents acknowledged that many stablecoins and wrapped tokens may be financial products under the current law. Many submissions also supported transitional relief for unlicensed intermediaries from the need to hold an Australian financial services (AFS) licence. This would allow them to continue dealing in stablecoins that are non-cash payment facilities and wrapped tokens that are derivatives until the commencement of the proposed Government reforms.

However, some respondents argued against licensing entities before any law reform is settled and takes effect, stating issuers needed more time to meet licensing requirements and that Government reforms may regulate these tokens differently.

For stablecoins, many respondents requested further details on stablecoin characteristics, including where a token is a derivative or other financial product.

A minority of respondents disagreed with ASIC’s regulatory classification and suggested that stablecoins should be treated as a bespoke financial product as they are not related to investments (like a security or a managed investment scheme). Some of this feedback seemed to assume a narrower view on the breadth of the existing regime in relation to non-cash payment facilities.

For wrapped tokens, feedback generally supported relief where there was no leverage, margin or a financial return – though there was some concern over ASIC providing special treatment to digital assets relative to other derivatives.

ASIC’s role is to administer the law as it currently stands. We have added examples of non-yield bearing stablecoins (that are non-cash payment facilities) and wrapped tokens (that are derivatives) to INFO 225.

After considering the feedback, we have decided, in principle, to give transitional class relief for secondary distributors of eligible stablecoins and wrapped tokens. We are seeking feedback on the draft instrument: see CS 32 Proposed relief for certain stablecoins and wrapped tokens, and extension of omnibus accounts for digital asset custody. Comments close 12 November 2025.

As at the date of this publication, two issuers of stablecoins have obtained an AFS licence. Other issuers of stablecoins and wrapped tokens will be able to apply for an AFS licence and consider the provisions of the class no-action outlined below.

We will continue to work with Government to support the development and implementation of the proposed reforms.

More generous class no-action to ease the transition to licensing

Respondents broadly supported a class no-action position, but with recommended revisions to the scope and conditions, including:

extending the AFS licence lodgement window to 12–24 months or until proposed law reform takes effect to digest the implications from INFO 225 and prepare licence applications
coverage of historical conduct, and
broadening no-action access beyond businesses operating before ASIC’s consultation – including to those in discussions with ASIC about licensing, new foreign entrants, related group entities, and firms ceasing or restructuring businesses.

Views varied on excluding crypto lending/earn products. Some supported exclusion due to their higher risk profile while others preferred inclusion because of broader regulatory uncertainty. The exclusion of crypto derivatives was largely supported, though some suggested including them for certain licence types.

After considering the feedback, we have issued a class no-action letter to support the transition to licensing for digital asset businesses.

The no-action position outlines the scope and conditions where ASIC does not intend to take action for breaches relating to the requirement to hold an AFS licence, Australian market licence, or Australian clearing and settlement (CS) facility licence.

It includes an AFS licence lodgement window no later than 30 June 2026. For Australian market and CS facility licences, the same window applies but rather than a licence lodgement, the requirement, among other things, is that ASIC is notified in writing of a person’s intention to apply.

The no-action position is subject to conditions including the requirement to have Australian Financial Complaints Authority membership and foreign company registration if not Australian-based.

Financial services relating to crypto lending/earn products, and crypto derivatives – other than wrapped tokens – are excluded from the no-action position.

The no-action position does not prevent ASIC from taking action where we see egregious conduct, particularly where there is actual or potential harm to vulnerable consumers or widespread misconduct causing serious consequences such as financial loss, reduced market confidence or fraud.

Refer to ASIC’s class no-action letter for digital asset businesses for the full scope and conditions.

Hypothetical practical examples are useful but would benefit from more detail and additional examples

Most respondents acknowledged the value of examples showing when a digital asset may be a financial product, but wanted more detail on how changes in features can change the regulatory classifications.

Other suggestions included adding significant digital assets (i.e. bitcoin and ether), wallets and variations of staking arrangements and gold-linked tokens to show how changes in features can change regulatory classifications. Some argued against adding stablecoins and derivatives to INFO 225 as practical examples: see previous section on stablecoins and wrapped tokens.

INFO 225 now includes five new examples (bitcoin, native proof-of-stake staking, tokenised real estate, wrapped tokens and non-interest bearing stablecoins) and five amended examples (managed staking/staking as a service, new blockchain, gold-linked token, yield-bearing stablecoin, and wallet). We informally consulted on these examples with some stakeholders before finalising INFO 225.

Some digital asset businesses may need tailored licensee obligations

Many submissions called for adjustments or alternatives to overcome perceived challenges encountered by the digital assets industry in meeting specific requirements, including:

the financial resource requirements for custodians – these were considered onerous by some respondents, particularly for smaller digital asset businesses
the requirement to hold client money in a separate trust account with an Australian authorised deposit-taking institution – some digital asset businesses have experienced debanking
professional indemnity insurance – this can be difficult for digital asset businesses to obtain
having suitably qualified responsible managers – there appears to be a shortage in the industry, and
preparing a target market determination under the design and distribution obligations – there may not be an identifiable issuer, or the product might be issued by someone who is not required to have a licence to provide financial services in Australia.

We have provided additional guidance in INFO 225 on these points raised by industry, to help businesses transition to the licensing regime.

Good practice guidance for custodial and depository services could be bolstered

Overall, respondents agreed that INFO 225’s guidance applies to digital asset custodial and depository service providers – but want it to go further.

Several respondents requested clearer criteria for when the custody standards are triggered and how different digital asset custody structures fit into the current regulatory framework. Some respondents also suggested that INFO 225 would benefit from additional good or best practice guidance.

The majority of respondents supported the use of omnibus arrangements to pool client assets under management.

We have clarified in INFO 225 that custodial or depository standards apply to any financial product, based on any technology, using the existing principles-based approach. We have also proposed relief that allows businesses to pool digital assets of clients in omnibus accounts: see CS 32 Proposed relief for certain stablecoins and wrapped tokens, and extension of omnibus accounts for digital asset custody. Comments close 12 November 2025.

A range of views on alignment between guidance and proposed law reform

Many respondents suggested different approaches. Some wanted ASIC to wait for law reform or the government to develop a separate regime for digital assets to accommodate the nuances of the industry. Some also commented that ASIC’s approach was inconsistent with international peers, suggesting more alignment was required.

Some respondents said that the principles-based approach in the Corporations Act was too wide and may capture activities like smart contracts or decentralised finance projects that can't comply with the regulatory regime. Others called for the guidance to be more specific and cover decentralised finance activities – for example, to clarify the legal accountability of developers in cases without a clear issuer.

Consumer advocates, and some law firms and financial institutions, broadly supported the updated guidance. Feedback showed the need to clarify how the legal and regulatory regime in Australia applies. We are working with Government on the proposed law reform, which will complement current financial services laws, and it therefore remains important to provide guidance on how the existing financial product definitions apply to digital assets in determining their regulatory classification.

The inclusion of practical examples in updated INFO 225 aims to help digital asset businesses understand when a digital asset may or may not be a financial product. INFO 225 also includes guidance on AFS licensee obligations.

Submissions

(non-confidential submissions)