Australia’s securities regulator is looking to extend retail investor protections to more crypto-related trading products. On Monday, the Australian Securities and Investments Commission said it may apply existing rules for contracts for difference to contracts settled with digital assets.
What ASIC wants to change
Contracts for difference let traders bet on price moves without owning the underlying asset. The current rules generally cover CFDs settled in cash or by offsetting obligations between the parties. ASIC now wants to include contracts settled by transferring digital assets, even if those contracts track non-crypto assets, as long as they meet other CFD criteria.
The proposal would bring those products under the same safeguards that already apply to retail CFDs. That includes caps on borrowed exposure and requirements for providers to close positions when account funds fall below set levels. Negative balance protection would also limit losses to the money in a client’s CFD trading account.
Not all crypto contracts are included
ASIC said some crypto futures and options with fixed expiration dates would stay outside the CFD rules. That distinction matters because the rules are not meant to capture every crypto derivative. The regulator is asking for feedback on the proposed extension and related amendments. Comments are open until Nov. 9.
Wider licensing changes are coming
Australia’s existing CFD rules started in 2021. Since then, the regulator has kept a close eye on how retail traders use these products. Crypto markets can move fast, and regulators worry that losses can pile up quickly when trading is done with borrowed money. The new proposal is part of a broader push to treat more crypto activities like traditional financial services.
Separately, Australia passed legislation in April to bring crypto exchanges and tokenized custody platforms under its financial services licensing system. The new regime takes effect on April 9, 2027. ASIC also told crypto firms relying on temporary enforcement relief under existing financial services law to apply for licenses by Sept. 30, or seek changes to their current licenses.
The consultation could lead to changes in how some crypto-settled CFDs are offered to retail clients in Australia. For now, it is a proposal. ASIC wants input before deciding on final rules. Market participants have until early November to make their case.
