Crypto exchanges and firms in Australia will face mandatory licensing under new guidance from the Australian Securities and Investment Commission (ASIC). Released on Dec. 4, the consultation paper classifies most digital assets as financial products, requiring firms in this sector to comply with regulatory obligations. Industry leaders have expressed concern over the impact on smaller businesses, which may struggle with the compliance costs that larger entities can more easily absorb. Legal experts note that launching a crypto venture in Australia could become more expensive than in offshore markets, which may drive innovation abroad. While the guidance aims to provide clarity to the crypto landscape, it could present challenges for local startups needing to maintain substantial financial reserves. ASIC's plan to broaden the definition of what constitutes a financial product could have significant implications for the crypto industry, contributing to consumer protection and market integrity. Stakeholders are encouraged to provide feedback on the proposed updates, with a final version expected in mid-2025.

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