Obtaining a cryptocurrency licence presents an opportunity to establish a digital asset business in one of the world's largest financial markets. Cryptocurrency adoption is rapidly accelerating across Australia. This article examines the regulatory environment surrounding digital currencies in Australia and the process of securing a remote cryptocurrency licence.

Milestones in the development of legislative regulation of cryptocurrencies in Australia

In 2017, Australia legally recognized cryptocurrencies under its AML/CTF regulations. The Australian SIC acts as the primary regulator under the Corporations Act (2001) for providers of digital asset financial products and services.

The AUSTRAC Centre serves as the lead supervisor for AML/CTF compliance. Under this framework, Digital Currency Exchanges (DCEs) must mandatorily register and report. To establish a licensed Australian cryptocurrency exchange, applicants must demonstrate compliance with all AML/CTF statutory obligations.

Australia also facilitates industry self-regulation, including bodies such as the ADCA Association. As a trade association, ADCA represents business interests by promoting best practice standards and the Digital Asset Industry Code of Conduct.

Additionally, Australian consumer law prohibits misleading and deceptive conduct in financial services. ASIC retains powers to investigate and prosecute token issuers, promoters, or intermediaries engaged in fraudulent ICO practices breaching the Competition and Consumer Act (2010).

Applicable laws for an Australian cryptocurrency licence

The regulatory regime applied to a virtual currency depends on its specific structure and embedded rights. Cryptocurrencies deemed securities fall under relevant securities laws. Those designated financial instruments become subject to financial market regulations.

To establish a licensed cryptocurrency exchange in Australia, applicants must:

  • Maintain customer accounts;
  • Undertake client verification and due diligence procedures;
  • Adhere to reporting requirements set by AUSTRAC and other regulatory bodies.

Additional licensing conditions may include:

  • Implementing risk management systems;
  • Enforcing KYC protocols;
  • Recording and reporting suspicious transactions;
  • Submitting to periodic audits and inspections.

Cryptocurrency exchanges facilitate the trading, conversion, and transfer of digital assets. Therefore, Australian regulators oversee exchange platforms to enforce anti-money laundering protections and mitigate illicit activities. By ensuring full regulatory compliance from launch, digital asset businesses demonstrate their legitimacy to partners and customers.

Regulation of managed investment schemes in Australia

A managed investment scheme (MIS) in Australia, also known as a pooled or collective investment, allows contributors to benefit financially from a pooled fund. If an MIS meets certain criteria, such as having more than 20 members, it must register with regulators to legally operate.

The rights granted to cryptocurrency token holders through white papers and investment contracts may potentially classify tokens as managed investment schemes. This specifically applies when issuers associate tokens with particular assets or trading activities, like venture capital or hedge funds, and distribute a digital asset rights package using blockchain.

As an MIS, cryptocurrency tokens would require registration with the ASIC. Key requirements may involve implementing governance standards, min. capital reserves, audited financial reporting, and compliance systems. Additionally, the scheme's responsible entity would need an Australian financial services licence to provide advice about MIS products.

By proactively evaluating regulatory designation, cryptocurrency projects can adopt best practices for managed schemes from launch. Taking these steps enables compliant token issuer operation while protecting the interests of token investors.

Taxation guidelines for cryptocurrencies in Australia

The nation's taxation office (ATO) has issued guidance regarding the tax treatment of virtual currencies under Australian tax law, particularly for Bitcoin. Cryptocurrency tax obligations may arise from activities subject to:

  • Income Tax

Income derived from cryptocurrency transactions may qualify as assessable income. This includes income from mining activities, exchanging tokens, cryptocurrency lending, staking rewards, and payments for goods or services made via cryptocurrencies.

  • Capital Gains Tax (CGT)

Cryptocurrencies are considered CGT assets in Australia. Token disposal may trigger capital gain/loss calculations, requiring taxpayers to track investment history.

  • Goods and Services Tax (GST)

While cryptocurrency transactions do not incur GST, they become subject to GST when spent on taxable goods or services. The ATO requires entities to integrate cryptocurrency processes within record-keeping and reporting systems.

By proactively clarifying cryptocurrency tax treatment, businesses can adopt compliant practices from launch. Obtaining guidance from accounting professionals also ensures cryptocurrency holders accurately assess complex obligations like capital gains calculations.

Note that this is not legal or tax advice. Please contact our experts if you would like to clarify any questions.


Here are several important pros for registering a cryptocurrency-related business in Australia:

  • Supportive regulatory environment: Australia has clear rules and guidance around cryptocurrency activities, which helps provide legitimacy and standards.
  • Advanced crypto ecosystem: there is growing crypto adoption in Australia, an educated talent pool, secure infrastructure, and access to investors/partners which aids business development.
  • Tax clarity: tax obligations around income tax, CGT, and GST for cryptocurrencies have been addressed by the ATO, which enables accurate compliance.
  • Consumer protections: registration means complying with AUSTRAC AML/CTF rules and ASIC regulations that build trust with customers.
  • Self-regulation opportunities: industry bodies like ADCA promote best practices through voluntary codes of conduct for registered entities.
  • Global reputation: being based in a well-regulated market like Australia allows businesses to more easily expand into other developed countries.

Registering a cryptocurrency company in Australia offers excellent opportunities to operate in a clear and evolving digital asset market. While ensuring full legal compliance at launch requires an investment of resources, the long-term legitimacy benefits registration provides for both the business and its customers are significant and worthwhile when scaled globally.

Consultation on the regulation of cryptocurrency activities in Australia will help you better understand what requirements need to be met in order to obtain a cryptocurrency licence in Australia.