Australia moves to tighten retail crypto derivative rules

The Australian Securities and Investments Commission (ASIC) aims to close a regulatory gap by subjecting crypto-settled derivatives to the same leverage limits and investor safeguards currently applied to traditional cash-settled contracts. Under the proposed update, any product with comparable economic risks will face consistent treatment, regardless of the underlying settlement method. The regulator explicitly seeks to prevent providers from lowering margin requirements by netting opposing positions, a common practice that critics argue obscures true exposure levels.

Data from the past year highlights the urgency behind the move: 68% of retail clients ended the period with net losses, a figure that climbed to 85% for those trading CFDs linked to options. While the existing intervention order, first introduced in 2021, has mitigated some risks, ASIC maintains that the potential for significant financial harm remains high. The proposed extension, which would last until 2037 if approved by the government, aims to provide long-term stability as the country prepares for a broader digital asset licensing regime scheduled for April 2027. Public feedback on these amendments is open until Nov. 9.