ASIC Says "Leverage Down Under" — Aussie Regulator Floats Crypto CFD Caps 🦘

Australia's securities regulator has proposed extending leverage limits and other retail investor protections to certain trading contracts that settle in crypto. The Australian Securities and Investments Commission (ASIC) on Monday unveiled the plan to expand rules governing contracts for difference (CFDs), instruments that let traders speculate on price moves without holding the underlying asset. The existing framework, introduced in 2021, caps leverage, requires automated position closures when account funds fall below specified thresholds, and provides negative balance protection limited to funds held in a client's CFD trading account.

ASIC's proposed extension would capture contracts settled by transferring digital assets, including derivatives tracking non-crypto underlyings, provided they meet the CFD definition. The regulator said crypto futures and options with fixed expiration dates would remain outside the CFD rules. ASIC is accepting feedback on the proposal and accompanying changes until Nov. 9.

The push arrives alongside broader Australian efforts to integrate crypto into its financial services perimeter. Legislation enacted in April brings crypto exchanges and tokenized custody platforms under the country's financial services licensing regime, with the new rules set to take effect on April 9, 2027. Separately, ASIC ordered crypto firms relying on temporary enforcement relief under existing financial services law to apply for licenses by Sept. 30 or seek modifications to their existing authorizations. Australia has also moved to tighten oversight of digital asset and remittance providers, announcing that 45 such registrations were removed over the past year.