ASIC clarifies regulation of digital assets: Are you already providing financial services?

ASIC updates INFO 225

On 29 October 2025, ASIC released its long-awaited update to Information Sheet 225 Digital assets: Financial Products and Services (INFO 225), setting out its interpretation of how Australia’s existing financial services laws apply to digital asset products and services. The release coincided with ASIC issuing its class no-action position, which gives industry participants until 30 June 2026 to obtain the necessary authorisations under an Australian Financial Services (AFS) licence.

The update marks a major development for those operating in the digital asset sector. While INFO 225 does not change the law, it represents ASIC’s most comprehensive statement to date on how it applies the Corporations Act 2001 (Cth) (Corporations Act) to digital assets. ASIC’s position is that most digital asset arrangements already fall within the existing financial services framework, meaning that entities issuing, dealing in or providing financial services in relation to these products are likely to require an AFS licence.

Clarifying the regulatory perimeter

INFO 225 provides practical guidance and examples to help industry participants determine whether their products or services fall within the definition of a financial product. ASIC emphasises that even if a digital asset is not a financial product when viewed in isolation, it may become one when combined with other features or services. ASIC expects entities to consider all rights and benefits attached to a digital asset and any related arrangements, including how the product is offered to and used by consumers in practice. This analysis is critical in determining whether a digital asset, or a related arrangement, constitutes a financial product. Where it does, the provider may already be carrying on a financial services business and therefore must hold, or be authorised under, an AFS licence to provide the relevant services.

In practice, this means that many digital asset businesses previously operating on the assumption that they were unregulated may already fall within the AFS licensing perimeter. Unlicensed entities may be providing financial services without authorisation, and existing AFS licensees may be offering financial services in relation to products for which they do not hold the appropriate authorisations. ASIC cautions that any entity operating without a licence, or without being an authorised representative of a licensee, must be prepared to substantiate and justify why its digital assets or related arrangements are not regulated financial products and why its activities do not require licensing.

INFO 225 now includes 18 worked examples showing how ASIC applies existing financial product definitions to a range of digital asset scenarios. These examples cover exchange tokens, yield-bearing and non-interest-bearing stablecoins, tokenised securities, tokenised bonds, derivatives referencing digital assets and non-cash payment facilities such as digital wallets.

What is and is not a financial product

ASIC’s worked examples illustrate that the classification of a digital asset depends on its specific features and the context in which it is issued, marketed and used. INFO 225 confirms that there is no single rule for determining whether a digital asset is a financial product, the assessment must be grounded in substance rather than form.

Examples ASIC considers likely to be financial products:

  • Staking and yield products: Services that allow users to earn returns through pooled or managed staking are generally treated as managed investment schemes or financial investments. ASIC’s view is that where users contribute assets that are used collectively to generate a return, the arrangement falls within the existing regime.
  • Yield-bearing stablecoins and asset-linked tokens: Stablecoins or other digital assets that offer a financial return or are backed by pooled assets are likely to be securities or interests in a managed investment scheme.
  • Wrapped tokens: ASIC continues to treat wrapped tokens as derivatives where the value of the wrapped token depends on, or tracks, another digital asset.
  • Custodial wallets and payment facilities: Wallet providers that hold or control client assets, or facilitate payments between users, are likely to be providing a non-cash payment facility and therefore a financial service.

Examples less likely to be financial products:

  • Bitcoin and similar native tokens: ASIC reiterates that Bitcoin is unlikely to be a financial product because it is not issued by an identifiable entity, does not create any enforceable rights or returns, and operates as a decentralised network token. Some comparable non-yield, widely traded tokens may also fall outside the framework, depending on how they are used.
  • Game coins: Tokens issued and used within a closed gaming environment, where they function purely as a medium of exchange for in-game items or services, are generally not financial products. Their purpose is transactional rather than investment-based.
  • Tokenised tickets: Tokens representing access to an event, such as a movie or concert, are unlikely to be financial products where they operate solely as digital proof of purchase or admission, even if their resale value increases.

ASIC’s examples highlight that similar products can be treated differently depending on their design, functionality and promotional materials. This reinforces the need for each token or service to be evaluated individually against the definitions of financial products under the Corporations Act.

Transitional arrangements and relief

To assist industry in transitioning, ASIC has adopted a class no-action position in effect until 30 June 2026 for providers of financial services involving digital asset financial products. This gives entities time to assess whether their activities fall within the AFS regime and, where required, to apply for or vary a licence accordingly.

The no-action position is subject to certain conditions and does not provide formal relief or immunity from the law. The no-action position applies only to entities providing financial services in relation to digital assets that are financial products. It is available where the entity:

  • commenced providing the financial service in Australia on or before 31 December 2025; and
  • lodges an AFS licence or variation application with ASIC on or before 30 June 2026 covering the relevant financial services.

Entities that choose to cease providing financial services may also rely on the position if they:

  • notify ASIC in writing by 30 June 2026 of their intention to cease operations, specifying a cessation date no later than three months after the notice; and
  • stop providing the services by that date.

The class position does not apply to:

  • crypto-lending or ‘earn’ products;
  • non-cash payment facilities other than stablecoins; or
  • derivatives (other than wrapped tokens) in relation to digital assets.

Link to broader reform agenda

INFO 225 aligns with the Government’s broader digital asset and payments system reform program. It complements Treasury’s work on the proposed regulatory regimes for digital asset platforms and tokenised custody platforms, and the Payments System Modernisation framework, which will establish a new licensing regime for payment service providers and payment stablecoins.

As at publication, the Government is consulting on exposure draft legislation to introduce digital asset platform and tokenised custody platform regimes as new financial products, and to regulate payment service providers and certain stablecoins. INFO 225 reflects the current law and may be updated following the finalisation of those reforms.

Next steps

Businesses should review their operations to determine whether their products or services fall within the financial product perimeter and ensure they hold, or obtain, the appropriate AFS licence authorisations. Entities relying on the transitional relief should act promptly to prepare and lodge their licence applications, or seek advice to confirm their position before the 30 June 2026 deadline.

For more information, email cmee@cnmlegal.com.au or amcaliece@cnmlegal.com.au, or call 07 3211 4010.