AFCA welcomes new crypto workload

The Australian Financial Complaints Authority (AFCA) has welcomed the pending increase in its workload flowing from the Australian Securities and Investments Commission (ASIC) requiring crypto currency firms to become AFCA members.

Under the ASIC guidance, announced on Wednesday, firms providing services related to digital assets that are financial products, including wrapped tokens, stablecoins, tokenised securities and digital asset wallets, are now required to become a member of AFCA and lodge an AFSL application by 30 June 2026 in line with Information Sheet 225.

Commenting on the situation, AFCA Lead Ombudsman for Investments and Advice, Shail Singh said the updated guidance requiring digital asset businesses to have an Australian Financial Services Licence “mean vital consumer protections are extended to investors of cryptocurrency and digital assets”.

“We expect better regulation will reduce fraud and security issues, and it also means cryptocurrency platforms will need to have internal dispute resolution processes for their customers, should they have an issue with a product,” Singh said.

“Consumers will also have the right to come to AFCA, as an independent umpire, if they can’t resolve a dispute with a licensed firm.”

Singh’s statement noted that, until now, cryptocurrency was not regulated as a financial product under the Corporations Act, so providers of cryptocurrency or digital assets were generally not required to be members of the AFCA external dispute resolution scheme.

However, he noted that some had chosen to be voluntary members or were members under a condition of an industry association.

In the 2024-25 financial year, AFCA received 159 complaints about cryptocurrency firms that were voluntary members with the top three issues being scams, interpretation of product terms and conditions and failure to act in a client’s best interest.

Singh said AFCA would work with digital asset businesses to ensure a smooth transition to the new arrangements.

“We stand ready to share our knowledge and expertise in complaint handling, with the common goal of preventing disputes in the first place and addressing those that do arise in a fair and efficient way.”