Consumer protection for crypto welcome news
Shail Singh
The Australian Financial Complaints Authority (AFCA) welcomes ASIC’s updated guidance that clarifies how existing laws apply to digital assets.
Firms providing services related to digital assets that are financial products, including wrapped tokens, stablecoins, tokenised securities and digital asset wallets, are now required to become a member of AFCA and lodge an AFSL application by 30 June 2026 in line with Information Sheet 225.
“The updated guidance from ASIC requiring digital asset businesses to have an Australian Financial Services Licence means vital consumer protections are extended to investors of cryptocurrency and digital assets,” AFCA’s Lead Ombudsman for Investments and Advice, Shail Singh said.
“We expect better regulation will reduce fraud and security issues, and it also means cryptocurrency platforms will need to have internal dispute resolution processes for their customers, should they have an issue with a product,” Mr Singh said.
“Consumers will also have the right to come to AFCA, as an independent umpire, if they can’t resolve a dispute with a licensed firm.”
Until now, cryptocurrency was not regulated as a financial product under the Corporations Act, so providers of cryptocurrency or digital assets were generally not required to be members of the AFCA external dispute resolution scheme. However, some had chosen to be voluntary members or were members under a condition of an industry association.
In the 2024-25 financial year, AFCA received 159 complaints about cryptocurrency firms that were voluntary members.
The top three issues were scams, interpretation of product terms and conditions and failure to act in a client’s best interest.
Mr Singh said AFCA would work with digital asset businesses to ensure a smooth transition to the new arrangements.
“We stand ready to share our knowledge and expertise in complaint handling, with the common goal of preventing disputes in the first place and addressing those that do arise in a fair and efficient way.”
