Although several governments are implementing pro-crypto regulations, some may raise concerns about inadequate oversight. The Australian Securities and Investments Commission (ASIC), Australia’s financial watchdog, is highly concerned about risks stemming from a lack of crypto oversight. In a recent report released by ASIC, the regulator stressed the question of why cryptocurrencies are not being properly regulated.
Australia’s financial system is moving to fragile zone, says ASIC Chair
Australia is now waving red flags over regulatory blind spots in crypto, making it a major upcoming risk in 2026. In the report, ASIC Chair Joe Longo emphasized that the country’s financial regime is gradually moving into fragility, given the cost of living, increasing debt, macro-economic factors, and rapid technological shift.
The financial regulator has found multiple factors undermining the financial security of the country. Among these, ASIC criticized AI and digital assets for bringing unclear rules that can expose consumers to misleading conduct or unlicensed advice.
As Joe Longo explained, the crypto and AI industries are expanding faster than the existing financial rules governing them. Crypto and AI are new niches when compared to other sectors. And, most of the users in these fields are quite fresh. This signals fake claims and unlicensed products that can harm consumers.
Australia lacks a standalone digital asset regulatory regime
Crypto is legal in Australia, although it does not have a comprehensive digital asset regulatory framework like the GENIUS Act, the upcoming crypto market structure bill, and the UAE’s VARA. The country uses some parts of the existing financial laws to monitor crypto activities, like the anti-money-laundering agency (AUSTRAC).
Amid this concern, a new chaos bloomed: Australia’s Federal Court penalized crypto service provider BPS Financial for promoting Qoin Wallet and Qoin token. The regulators found out that the firm offered its services without an Australian Financial Services Licence (AFSL).
Australia’s leap into blockchain regulation is something that cannot be left unnoticed. In late 2025, it introduced a new bill that targets crypto platforms and custody providers to obtain a financial services license.
Crypto is innovative. It is a means to access money in a modern way. To smooth the conduct of the crypto industry, comprehensive regulations must exist, and only then is the right time to call crypto innovative. As mentioned, crypto is not restricted in Australia; however, the government is trying to bring the industry under proper regulatory oversight.
