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【Australia ASIC proposes extending CFD investor protections to crypto-settled derivatives】
The Australian Securities and Investments Commission (ASIC) proposes expanding the regulatory scope of contracts for difference (CFD), bringing derivatives settled using digital assets within it.ASIC seeks to add to its CFD definition contracts settled through the transfer of digital assets, rather than limiting it to contracts settled in cash or through offsetting transactions, provided that these contracts meet the other classification criteria of CFD. If the proposal is approved, Australian traders using crypto-settled CFD would receive the same protections as traders using cash-settled CFD products.ASIC explicitly states that certain crypto futures and options with fixed expiry dates would remain outside this framework.CFD allows traders to trade on price movements without holding the underlying asset. Australia's current framework, implemented from 2021 onward, includes leverage caps, mandatory close-out for margin calls, and negative balance protection, which limits client losses to the funds in their CFD trading account.ASIC is consulting industry and stakeholders on the proposed expansion and amendments, with a deadline of November 9. The move comes as Australia strengthens its broader digital asset regulation. This year,April, Australia passed legislation bringing crypto exchanges and tokenised custody platforms into its financial services licensing framework, with the new regime taking effect on April 9, 2027.ASIC also requires crypto companies relying on temporary enforcement relief under existing financial services law to apply for a licence or seek changes to an existing licence by September 30.