The Australian Securities and Investment Commission (ASIC) has finally released its final update to Information Sheet 225 (INFO 225). The update sets out ASIC’s final decisions on when digital asset products fall within Australia’s financial services regime, the Corporations Act 2001.
The update coincides with a range of ‘no action’ relief instruments meant to give the industry breathing space before licence application lodgement becomes mandatory on 30 June 2026.
The Significance of ASIC’s Information Sheet 225 Update
INFO 225 isn’t a new law but guidance that was released by ASIC back in 2017, with updates made in 2018, 2019, and 2021. It’s aimed at regulating all firms involved in digital assets, whether they are financial businesses, digital asset businesses, brokers and intermediaries, or professional advisers to the industry.
In December 2024, ASIC started consultations on updates to INFO 225 through Consultation Paper 381 (CP 381). These were aimed at clarifying whether certain digital products are financial products, and they also sought feedback on the application of existing AFS licensee obligations to digital asset businesses. This was alongside a potential relief for wrapped tokens and ‘stablecoins’ as they transition to new government payment laws, as well as a potential class ‘no action’ position for digital asset businesses to transition to licensing.
Consultation ended in February 2025, and ASIC has now released the final updates to INFO 225. Among other things, the update has:
- Expanded product classifications and provided 18 detailed worked examples that show how ASIC will interpret products. This includes products and services like wrapped tokens, stablecoins, staking-as-a-service, tokenised assets, and Bitcoin (BTC).
- Introduced a “no-action” position that offers transitional relief from enforcement action if a business currently breaches the requirement to hold an ASF licence.
- Clarified the application of existing AFS licensee obligations to digital assets (e.g., custody standards, DDO).
- Shifted terminology from ‘crypto-assets’ to the broader ‘digital assets’ to reflect the inclusion of tokenised assets (e.g., tokenised real estate) under the guidance.
This is alongside the main clarification on what constitutes a financial product.
What is a Financial Product Now?
The core purpose of the update was to clarify the products that are to be grouped as financial products and subject to an AFS licence. However, while the information sheet provides technical clarifications, it was already generally agreed that products related to payments or investment are financial products, excluding items with their own independent value, like Bitcoin (BTC).
While announcing the release of INFO 225, ASIC Commissioner Alan Kirkland said, “Many widely traded digital assets are financial products under current law – and will remain so under the Government’s proposed law reform – meaning many providers require a financial services licence. Licensing ensures consumers receive the full suite of protections under the law and allows ASIC to act when poor practices lead to harm.”
To substantiate the classification of different products and services, ASIC analyses whether the features or rights attached to a token meet the legal definition of an investment, a loan, or insurance under the Corporations Act 2001. If it does, it’s classified as a financial product.
This approach quickly brings many common market activities under the definition of Managed Investment Scheme (MIS), which is where client funds are pooled and used in a common enterprise (e.g., managing a staking node). or trading portfolio) for a financial return, with clients having no day-to-day control.
The definition covers staking and yield products right away, as these services rely on a platform’s managerial expertise. Native staking doesn’t, as a user manages their own keys and validator, so it’s excluded.
ASIC also views tokens that derive value from a referenced asset, such as the price of native Bitcoin, as derivatives. This captures wrapped tokens, and dealing in or advising on them requires an AFS licence alongside other compliance requirements.
The other main area of focus is stablecoins. Here, non-yield-bearing stablecoins used purely for transactions are grouped as Non-Cash Payment (NCP) Facility. However, those that accrue interest or yield are likely to be an MIS, triggering the full investment regime.
ASIC’s “No-Action” Bridge
ASIC recognises that some of the guidance, especially relating to products like staking-as-a-service and wrapped tokens, immediately renders many digital asset businesses unlicensed under the Corporations Act 2001. As a result, it has issued a Class No-Action Letter to avoid sudden market disruption.
This instrument promises businesses that ASIC won’t take action for lack of an AFSL or market licence, provided they adhere to various strict conditions meant to protect users from exploitation.
The lapse of the no-action position is 30 June 2026 for businesses that will already be in operation on or before 31 December 2025. The companies then need to lodge an AFSL application or notify ASIC of their intention to apply for an Australian Market Licence or a Clearing and Settlement Facility Licence before the specified date.
The relief will then remain in effect while ASIC processes the application. However, if a business fails to comply with the set date and doesn’t apply or notify ASIC, it will be immediately classified as an unlicensed operation.
The Next Actions for Digital-Asset Platforms
This update provides much-needed clarity for the Australian market, and most digital asset platforms need to start acting right away.
Conduct a Comprehensive Product Audit
The first step for DAPs and TCPs is to assess their services. They need to determine precisely which tokens and services are now classified as regulated financial products under Managed Investment Scheme (MIS), Derivatives, or Non-Cash Payment (NCP) Facilities. They then need to map each of these to its requirements under the Corporations Act 2001.
Secure AFCA Membership
All businesses providing financial services to retail clients are required to have membership in an approved external dispute resolution (EDR) scheme. For all AFSL holders, this scheme is the Australian Financial Complaints Authority (AFCA).
The membership requires companies to establish a robust Internal Dispute Resolution (IDR) system within their platform and then apply for membership. It’s a crucial part of ongoing AFSL obligations.
Establish Organisational Competence (Responsible Managers)
ASIC licensing usually requires companies to prove that they are actually competent in their area of focus, something done through nominated Responsible Managers (RMs). This is often the most challenging part of the AFSL application process, so firms need to act promptly.
Begin the Licence Application Preparation
DAPs then need to start preparing for the AFSL application by meeting various financial and operational requirements. The application itself is done through the ASIC Regulatory Portal and requires a fair number of documents.
It will be a costly process for businesses, but it’s a key part of legalising crypto businesses as governments all over the world push for a safer digital market.
