Australia Drives Comprehensive Crypto Regulation with New Legal Framework

Australian regulatory authorities have taken a decisive step toward modernizing the sector. A Senate committee has endorsed a legislative initiative that would transform how the cryptocurrency ecosystem is overseen in the country, bringing exchanges and custody services under a consolidated and more rigorous financial services regime.

New licensing regime for cryptocurrency platforms and custodians

The Australian Senate Economics Legislation Committee released a report last Monday supporting the Digital Assets (Companies Amendment) Act 2025. This legislative initiative aims to establish traditional market safeguards while modernizing digital asset oversight, combining consumer protection with a coherent regulatory framework.

The proposal would create a licensing and compliance regime for digital token administrators by amending the Corporations Act 2001 and the Australian Securities and Investments Commission (ASIC) Act. The regulatory approach targets companies that custody digital assets on behalf of their clients, subjecting them to existing financial services standards rather than trying to regulate the underlying blockchain infrastructure.

If enacted into law, companies operating without an Australian Financial Services License (AFSL) will have six months to obtain the necessary authorization and adapt to the new regulatory framework. Notably, cryptocurrency exchanges already operating in Australia are required to register with AUSTRAC as digital currency providers, a requirement that this new legislation would complement with more comprehensive standards.

Prediction industry attracts massive investment under improved regulatory framework

The regulatory clarity generated by such legislative initiatives is catalyzing financial innovation in other emerging segments. Simultaneously, a new venture capital firm called 5c© Capital has emerged, launching with a specialized focus on prediction markets, backed by executives from leading platforms Polymarket and Kalshi.

The initiative aims to raise up to $35 million to invest in approximately 20 early-stage startups over the next two years. The fund will prioritize developing infrastructure and complementary services for cryptocurrencies and prediction markets, such as data analysis tools, liquidity provision, and compliance systems, rather than focusing solely on exchange platforms.

The launch reflects the acceleration in the growth of prediction markets, which have seen a notable increase in trading volumes, user bases, and attention from major cryptocurrency platforms and retail operators. The backing has already attracted more than 20 initial investors, including portfolio managers from renowned institutions like Millennium Management and other founders of established prediction platforms in the sector.