Australia Warns Unlicensed Crypto Firms of Up to 10% Annual Revenue Fines
The Australian Securities and Investments Commission (ASIC) has issued an ultimatum: digital asset companies relying on the industry-wide "no action" stance must apply for or change their Australian financial services license by September 30, or they may be deemed illegal starting October 1, facing civil and criminal penalties including fines of up to 10% of annual revenue.
Institutions requiring an Australian market license or clearing and settlement facility license must notify their intentions in writing and complete a pre-application meeting by the same date. The updated information sheet 225 includes stablecoins, wrapped tokens, tokenized securities, and digital asset wallets as financial products, with the no action letter issued concurrently. The deadline for the June 30 cutoff has been extended from June 30 to September 30, covering licensed institution authorized representatives and some intermediary arrangements. Since the guideline update, over 45 related license applications have been recorded, with about 30 during the June extension.
The "Companies Amendment (Digital Assets Framework) Act 2026" was approved in April and will take effect on April 9, 2027. At that time, digital asset platforms and tokenized custody platforms will still require corresponding authorization, forming a two-step transition: first passing the financial services license gate, then supplementing with new framework authorization. Those who do not submit at the first gate will be exposed to both sets of laws. The Federal Court has imposed a fine of approximately AUD 14 million on BPS Financial for operating the unlicensed Qoin wallet, including about AUD 1.39 million for operating without a license and about AUD 8.31 million for misleading conduct, and has prohibited further false statements with a ten-year restriction on unlicensed financial services operations. The High Court has also determined that Block Earner's fixed income products are financial products and derivatives, requiring licensing.
Company civil penalties are based on the highest of three amounts: 50,000 penalty units, three times the profits gained, or 10% of annual revenue (with a cap of 2.5 million penalty units). Starting July 1, 2026, each penalty unit will be AUD 364, resulting in a fixed cap of approximately AUD 18.2 million, with the 10% revenue cap around AUD 910 million.
Who is buying and who is selling: the event is driven by the expiration of the enforcement grace period, not by new charges. The licensed application is a choice to continue operating; those who do not apply are selling the risk of being prosecuted. Beneficiaries are the more than 45 applicants already in line, while the pressure is on the majority of about 400 local platforms that remain unlicensed. Funding is shifting from "doing first and then applying for a license" to compliance officers, lawyers, and capital occupation.
Source: Public Information
ABAB AI Insight
ASIC's information sheet 225 categorizes stablecoins and custody wallets as existing financial products, and the industry-wide no action letter has extended the application window by ten months, indicating slow industry digestion and the need for regulatory tightening. The digital asset framework law will not take effect until 2027, and current penalties are based on Section 911A of the Companies Act for unlicensed operations, not waiting for the new law. The BPS and Block Earner cases narrow the defense that "tokens are not financial products."
The capital pathway is pushing exchanges, wallets, and tokenization platforms into the capital, custody, and honest and fair obligations of the Australian financial services license. Money flows to licensed entities and intermediaries that can act as authorized representatives, rather than opening another unlicensed website. The motivation is retail protection and market integrity, with the cost being that small platforms use 10% of annual revenue as an exit option.
The comparison is with the EU MiCA, UK FCA peddling licenses, and the same 10% revenue penalty already implemented for traditional brokers in Australia. The industry's position has shifted from a "guideline observation period" to a "post-deadline prosecutable period," with expansion halted and control resting with the application queue and pre-meeting calendar.
Structural changes reflect regulatory changes. The mechanism is to first define products as regulated objects through interpretation, then remove the no action stance, automatically applying the penalty formula to company penalties; the revenue percentage links potential penalties for large exchanges to their scale, while small platforms may be banned before facing fixed penalty units.
ABAB News · Cognitive Law
Once the grace period stops, being unlicensed is an option priced by revenue.
First change the product definition, then withdraw the protection letter.
The compliance window sells not innovation, but the right to continue operating.