Digital assets are well and truly in the spotlight.
Yesterday, ASIC released its updated INFO 225 which clarifies how existing laws apply to digital assets. Simultaneously, ASIC has issued a sector wide no-action position until 30 June 2026 to give digital asset businesses and providers of financial services involving digital assets around 8 months to transition to and obtain appropriate AFS licensing.
Key Takeaways
INFO 225 covers a large range of businesses
Digital asset financial services / product providers to either review their AFSL or consider if they are now captured by the regime well in advance of the 30 June 2026 deadline
Specific action for current AFSL holders
Financial advisors are now expected to have a working knowledge of the technology underpinning digital assets that they advise on
INFO 225 covers a lot of ground.
It describes 18 worked examples of digital assets and sheds light on ASIC’s views and thresholds for the classification of digital products within a range of different financial product classes. However, consistent with ASIC’s previous approach, the burden is on the issuer or provider to assess whether their digital asset products and services have crossed these boundaries both upon issue and as a result of changes to their product features.
Seven interesting developments:
Expertise for advisors and RMs: Financial advisors are expected to have a working knowledge of the technology underpinning digital assets that they advise on and should be able to explain the extent that the technology changes the risks and benefits for consumers. Responsible managers generally must have experience in the products and services offered, an understanding of the technology and the regulatory requirements of an AFS licensee. As a transitional measure, 2 or more people could make up the responsible managers requirement (iI.e one overseeing regulatory aspects and one overseeing operational business aspects of digital assets).
Bitcoin not a financial product: This is consistent with Treasury’s position and also brings this full circle with the initial position in INFO 225 which was later removed.
Disclosure about digital asset products: ASIC provides minimum requirements for disclosure about digital assets in disclosure documents. These are set in the context of PDS’ but are also recommended in the wholesale context. Minimum requirements include information about the characteristics of digital assets; the technologies that underpin digital assets (blockchains, distributed ledger technologies, cryptography etc); how digital assets are created, transferred and destroyed; how digital assets are valued and traded and how digital assets are held in custody. A range of specific risks are also set out.
Market making authorisation vs licence: Acting as a market maker or broker (acting on behalf of one party to a transaction) is likely to attract an AFS licence authorisation obligation whereas parties acting on both sides are likely to attract an obligation for a market licence.
PI Insurance and bank accounts: Relief may be available where product issuers make genuine attempts but cannot obtain PI insurance or ADI accounts to meet regulatory requirements (i.e. client money requirements) and comparable alternatives can be obtained.
Asset types for registered schemes: The ‘crypto-asset’ asset type should be applied for where a registered scheme holds digital assets that are not financial products and otherwise the asset type should reflect the financial product which the digital asset is classified as.
Relief for stablecoin and wrapped token distributors: ASIC has also proposed a draft instrument to provide relief for eligible stablecoins and wrapped token distributors. The deadline for feedback is 12 November 2025. Importantly, the ASIC guidance reflects the current legal framework. While there is some alignment generally with Treasury’s proposals there are some inconsistencies in the positions on stablecoins and wrapped tokens. This relief recognises the broader transition and could help bridge the gap in the interim.
While many digital asset offerings do not fit neatly within the financial services / products regulatory definitions – ASIC’s guidance provides welcome insights. It is also an urgent prompt for digital asset financial services / product providers to either review their AFSL or consider if they are now captured by the regime well in advance of the 30 June 2026 deadline.
For example, digital asset businesses need to consider if their products or services constitute a facility for making a financial investment, an interest in a managed investment scheme, a security (e.g. a share or a debenture), a derivative or a non-cash payment facility.
Next steps
INFO 225 covers a large range of businesses involved in digital assets, including:
existing financial services and financial markets businesses;
businesses exploring the application of blockchain technology to existing financial products and real-world assets (e.g. tokenisation);
brokers and intermediaries;
digital asset wallet providers;
investment or asset managers and custodians.
For AFSL holders:
Changes to your AFSL: Review your current product offering and consider whether your product, service or any specific features involving digital assets may trigger the financial products or services definitions based on ASIC’s new guidance – and which may require changes to your AFSL.
Appropriate expertise: Consider if your responsible managers or financial advisers hold the relevant expertise to act as a responsible manager or advise on certain digital asset products given ASIC’s new expectations.
Disclosure: Consider if you should amend any disclosure documents to align with ASIC’s recommendations (for retail and recommended for wholesale). It is important to ensure that ongoing disclosures are kept up to date.
If you do not currently hold an AFSL, but deal in digital assets, consider if your conduct may be captured and whether you now need an AFSL.
If you have any questions about the changes to INFO 225 or require any assistance to adjust to the guidance please get in touch with Cowell Clarke’s Financial Services team at compliance@cowellclarke.com.au.
This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice. You should not act upon the information contained in this publication without obtaining specific professional legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.
