The Australian Securities and Investments Commission (ASIC) has released its May 2025 Market Integrity Update, highlighting the launch of a new portal for Australian Financial Services (AFS) licence applicants and encouraging cryptocurrency exchanges to review their token listing practices for tokens which may be at risk of being deemed financial products under Australian financial services laws.
Digital asset platforms encouraged to strengthen token listing practices
ASIC has reiterated its expectation that digital asset platforms maintain robust, well-documented processes when assessing tokens for listing. The regulator observed that while most platforms have frameworks in place, the quality and consistency of their application varies significantly, particularly where reliance is placed on information from affiliated overseas entities or token issuers.
“We encourage platforms to do their due diligence. In some cases, platform listings can include hundreds of digital assets. Undertaking a robust legal analysis and risk assessment of each token are important controls to protect consumers.”
ASIC noted some platforms have already taken steps to review and enhance their listing governance, including obtaining external legal advice and establishing regular internal audits. In light of ASIC’s continued focus in this area, now is an opportune time for platforms to revisit their listing practices to ensure that have in place robust legal criteria and compliance measures to address the risk of listing tokens which may require a financial services licence or could pose consumer harm owing to poor disclosure or market conduct risk.
ASIC has stated that it will continue to monitor listing practices as part of its broader digital assets work. In the absence of decided cases, exchanges will need to rely mostly on ASIC guidance and general principles in undertaking token assessments. In recent times, ASIC has reiterated its willingness to test the regulatory perimeter in relation to crypto-asset offerings by pursuing cases on appeal even where there is no evidence of consumer losses. Robust compliance policies and legal advice can help mitigate potential penalties in the event of enforcement action. The industry remains frustrated that no pathway to compliance or guidance has been issued despite a Token Mapping exercise being run by Treasury. While ASIC stated historically that decentralised tokens are not financial products, they have indicated their view has ‘evolved’ but no underlying reasoning for the change in position has been provided. Reading between the lines, the regulator appears to be hinting that exchanges should be ensuring they have a reasonable basis to form a view as to whether tokens are securities / financial products or not. The absence of any guidance, but past suggestions by ASIC that tokens may be financial products remain consistent with the now abandoned approach of Chair Gensler of the SEC in the US. As licensing approaches for crypto exchanges and other businesses, they will be increasingly likely to face a ‘reverse onus’ and need to prove the tokens they are listing are ‘suitable’ for users, particularly if ASIC decides to use their product intervention powers once licensing comes into place.
