Australia will impose penalties of up to 10% of annual turnover on digital asset platform operators that breach proposed rules, under draft legislation released on Thursday (September 25).

According to Bloomberg, crypto exchanges and other platform operators will be required to hold an Australian Financial Services License.

Under the license framework, firms that fail to act “honestly and fairly” or engage in “misleading and deceptive conduct and unfair contract terms” could face the greater of either an A$16.5 million penalty, three times the benefit obtained, or 10% of annual turnover.

The draft legislation, open for industry feedback until October 24, represents one of the government’s most significant steps towards regulating Australia’s digital asset sector, which already includes major global players such as Coinbase and Kraken.

Australia’s financial regulators, including its securities and prudential watchdogs, tax office, and central bank, have previously warned about the risks tied to surging crypto investments.

In August, the country’s financial crimes agency directed Binance‘s local arm to appoint an external auditor over money laundering and terrorism financing concerns.

Treasury stated that the new rules would bring digital asset and tokenised custody platforms under the Corporations Act, extending consumer protections and licensing requirements.

“Clear, fit-for-purpose regulation will support economic growth, increase choice for consumers, and ensure Australia remains competitive globally,”

said John O’Loghlen, Australian Country Director and APAC Managing Director of Coinbase.

“We look forward to working constructively with government and industry as the legislation progresses.”

Platforms holding less than A$5,000 per customer and processing under A$10 million in annual transactions will be exempt.

Featured image credit: Edited by Fintech News Singapore, based on image by fabrikasimf via Freepik

This article first appeared on Fintech News Singapore