Australian crypto companies have rushed to initiate the application process for financial services licenses before the deadline of September 30, in order to continue to be covered by the temporary "non-enforcement" protection provided by the Australian Securities and Investments Commission (ASIC) before it expires.

ASIC indicates that companies that adhere to a 'non-enforcement' stance within their industry must apply for an Australian Financial Services (AFS) license by the end of Wednesday, or apply for a license change, in order to continue to offer their digital asset products or services under the existing financial services legislation.

For companies that require an Australian market license or a license for clearing and settlement facilities, the requirements are slightly different. They must notify ASIC in writing of their application intentions by September 30th and hold a pre-application meeting with the regulatory authorities.

According to ASIC, starting from October 1st, those enterprises that require authorization but do not meet the temporary exemption conditions may be considered in violation of financial services laws. ASIC indicates that such violations could result in civil and criminal penalties, with fines potentially reaching up to 10% of the annual turnover.

Since ASIC updated its information note 225 ( Information Sheet 225 ) in October 2025, more than 45 enterprises related to digital assets have submitted applications for licenses seeking authorization.

ASIC The grace period ends after September 30th.

This deadline marks the end of the transition period set by ASIC. This transition period was intended to allow crypto companies to assess whether their products and services are already covered by Australia's existing financial services laws.

ASIC Initially, the deadline for affected enterprises to obtain their operating licenses was June 30, 2026. In June, regulatory authorities granted the enterprises an additional three months, extending the deadline to September 30, citing challenges faced by the industry during the transition period.

This stance of 'not enforcing the law' does not mean that the company has obtained a license, nor does it exempt it from complying with financial services laws. On the contrary, it merely specifies the circumstances under which ASIC will not take enforcement action during the authorization process required for the company's progress.

Therefore, October 1st will not bring a new licensing law to every crypto company in Australia. It merely repeals the temporary legal protection that those companies who were eligible for this arrangement but had not yet met the requirements enjoyed.

Crypto.news Previous reports stated that ASIC issued a final warning earlier this month, urging eligible companies to proceed with the licensing process before the end of the grace period.

The INFO 225 guide of ASIC explains how existing financial product regulations apply to digital assets and related services. Its scope covers enterprises, brokers, and intermediaries that focus on digital assets, as well as traditional financial service companies that use blockchain technology or tokenize existing financial products and real-world assets.

Whether a license is required depends on the legal rights and characteristics associated with the product or service. Even if a digital asset is not a financial product in itself, it may still be used in arrangements or services that fall under the scope of financial services regulation.

What will happen to crypto companies after October 1st?

Those enterprises that should have applied for a AFS license or license change but did not meet the ASIC grace period conditions may face regulatory actions after the "non-enforcement" stance ends.

ASIC does not imply that all companies without a license will automatically face enforcement on October 1st. The warnings from regulatory authorities are aimed at those companies that, according to current laws, require authorization but have not yet taken the necessary steps to remain within the 'non-enforcement' arrangement.

The legal scope of application of these rules has previously been tested in court.

In June, the High Court of Australia unanimously ruled that Block Earner's previous fixed-income crypto products required a financial services license.

The court held that the Earner product operates as a facility, through which users make financial investments, and it complies with the definition of derivatives provided by the Company Law. This ruling overturned previous appellate judgments and remanded the case to the federal court in its plenary session to hear the appeal raised by ASIC regarding the penalty.

For companies that enter the licensing process by the deadline on Wednesday, submitting an application does not equate to obtaining regulatory approval. Applicants still need to meet the requirements associated with the licenses they are applying for, while also complying with the conditions that allow them to rely on the transitional status of ASIC.

ASIC has not disclosed the identities of more than 45 applicants, nor has it indicated how many of them are exchanges, custodian institutions, tokenization services providers, or other digital asset service providers.

Australia's next round of crypto licensing regime will be launched in April 2027

The grace period ends on September 30th, which is a separate matter from Australia's new legal framework for digital asset platforms and tokenized custody platforms.

The "Company Amendment (Digital Assets Framework) Act 2026" was passed by parliament on April 1st and received royal assent on April 8th, with plans to come into effect on April 9, 2027.

The Economic Legislation Committee of the Australian Senate has previously supported this framework. This framework establishes specific rules for digital asset platforms that hold customer assets and for tokenized custody platforms.

According to the law, ASIC will be responsible for issuing licenses and regulating enterprises that fall into the new category.

Digital asset platforms can cover the operation of holding digital assets on behalf of clients, and provide arrangements related to services involving these assets. Tokenized custody platforms, on the other hand, involve the operation of holding underlying assets and issuing tokens that represent clients' rights to those assets.

Regulatory authorities plan to establish operational standards that cover asset holding, trading, and settlement, while also setting financial requirements for enterprises entering this system. It is expected that the relevant regulatory guidelines will explain how ASIC will issue licenses and supervise the covered enterprises.

The implementation roadmap for ASIC is divided into multiple phases. In the later stages of the implementation period, the operators of DAP and TCP will be able to submit applications for financial service licenses and operate under regulatory allowances during the application processing period.

Full implementation, including the supervision and law enforcement of ASIC under the new framework, will begin after the 18-month implementation period ends.

Existing licenses will still be important after April.

Therefore, for some crypto companies, meeting the deadline of September 30th is not the final step.

ASIC indicates that many of the authorizations obtained under the current financial services framework will still be necessary once the digital assets framework comes into effect. Enterprises that fall under the coverage of the new DAP or TCP categories may need to incorporate these relevant authorizations into their licenses after the system is launched in April 2027.

The current advancement in licensing is stemming from ASIC's updated stance on digital assets, namely INFO 225. In October 2025, regulatory authorities revised this guideline to clarify how existing laws apply to products such as stablecoins, wrapped tokens, staking arrangements, and tokenized assets.

The temporary extension was introduced to give companies time to assess the updated guidelines and to proceed with the licensing process if necessary. The original deadline of June 2026 was later postponed to September 30th, as ASIC further clarified the scope of the 'non-enforcement' stance and expanded the eligibility for certain enterprises that operate through authorized representatives and intermediaries.

Changes in crypto regulation in Australia are not limited to ASIC licenses. Since July 1st, a new crypto travel rule has come into effect, requiring regulated service providers to collect specified information regarding all parties involved in the transfer of covered virtual assets.

ASIC will now continue to advance the rule-making required for the April 2027 framework, including conducting consultations on asset holding, trading, and settlement standards, as well as financial requirements. Regulators plan to issue more guidelines while continuing to communicate with digital asset companies.