Australia is considering new restrictions that would prevent cryptocurrency exchanges from trading against their own customers as part of a broader effort to strengthen market transparency and protect digital asset investors.
The Australian Securities and Investments Commission (ASIC) outlined the proposed restrictions on October 15, 2026, as part of a consultation on new standards for cryptocurrency trading and custody platforms ahead of the country’s digital asset regulatory framework taking effect in April 2027.
Under the proposal, digital asset platforms that match customer orders would generally be prohibited from trading as principal on their own platforms. Related companies would also face restrictions on trading as principal through those platforms, subject to certain exceptions.
The proposal targets potential conflicts of interest that can arise when an exchange facilitates customer trades while also trading for its own account.
ASIC Targets Conflicts of Interest
When a cryptocurrency exchange trades against its own customers, it may face competing interests between executing customer orders fairly and generating profits from its own trading activities.
ASIC’s proposal aims to address these concerns by separating customer order-matching services from certain forms of proprietary trading.
The restrictions would also affect related companies operating within the same corporate group, particularly where those businesses trade through an affiliated exchange.
However, the proposal includes model-specific exceptions, meaning the restrictions would not necessarily apply in the same way to every trading arrangement.
The regulator is seeking feedback from industry participants before finalising the proposed standards.
New Rules Planned for April 2027
The proposed trading restrictions form part of Australia’s wider digital asset regulatory framework under the Corporations Amendment (Digital Assets Framework) Act 2026.
The legislation brings digital asset platforms and tokenised custody platforms within Australia’s financial services licensing framework, introducing requirements covering customer asset protection, trading practices, settlement and financial resources.
ASIC is consulting on the standards and guidance businesses will need to follow under the new framework.
The consultation opened on October 15, 2026, and submissions are due by November 27. The regulator expects to publish final guidance in March 2027.
The new framework is scheduled to commence on April 8, 2027, while existing operators will have until October 7, 2027, to submit the relevant licence applications under the transitional arrangements.
Crypto Platforms Face Tighter Oversight
Beyond restrictions on proprietary trading, ASIC is proposing additional requirements for customer asset custody, financial resources and operational transparency.
The proposals include quarterly reporting on wallets holding customer assets, alongside record-keeping requirements intended to improve regulatory visibility into how platforms manage digital assets.
The regulator is also considering different capital requirements depending on a platform’s business model and risk profile.
For cryptocurrency exchanges, the proposed rules could require changes to trading operations, relationships with affiliated market makers and internal compliance systems.
The restrictions remain proposals and are subject to consultation, rather than a blanket ban already in force.
If adopted, they would form part of Australia’s effort to bring digital asset platforms under financial services rules and address risks associated with conflicts of interest, customer asset management and trading transparency.