AFSL for Crypto Exchanges in Australia: AFSL vs CAR -

(Timeframes, Requirements, Costs + 30 June 2026 Deadline)

Australia’s regulatory direction is clear: many crypto exchanges and digital asset business models will need to operate under an Australian Financial Services Licence (AFSL) either by holding your own licence or by becoming a Corporate Authorised Representative (CAR) under an existing AFSL.

At LicensingExpert.com.au, we help crypto exchanges and DCE operators map their model, choose the right pathway, and prepare the documentation to apply for an AFSL or secure CAR authorisation (general information only).

Table of contents

Why DCE registration isn’t the same as an AFSL
The two pathways: Own AFSL vs CAR
Key requirements ASIC focuses on (Responsible Managers + competence)
Timeframes: weeks vs months (and ASIC’s service standards)
Costs: “rent an AFSL” vs owning your own
The 30 June 2026 no-action window (what it is and what it excludes)
Practical checklist: what you should prepare now
FAQs
Disclaimer

Why DCE ( VASP – Virtual Asset Service Providers ) registration isn’t the same as an AFSL

Most crypto exchanges start with AUSTRAC registration as a Digital Currency Exchange (DCE), but AUSTRAC registration meets an exchanges Anti money laundering and KYC provisions AML/CTF and it is not a financial services licence. AUSTRAC also requires DCEs to renew registration every 3 years.

ASIC, on the other hand, regulates financial products/services. ASIC’s INFO 225 explains when digital asset activities may trigger obligations under the Corporations Act and the ASIC Act.

The two pathways: Own AFSL vs CAR

Option 1: Obtain your own AFSL (apply via a provider like Licensingexpert.com.au)

Best for exchanges that want:

long-term control of their model and approvals,
independence from third-party licensees,
Provides a scalable compliance foundation.

Option 2: Become a Corporate Authorised Representative (CAR) under another AFSL

A CAR is a body corporate appointed by an AFSL holder to provide specified financial services on the licensee’s behalf. ASIC outlines how licensees appoint and cease authorised representatives and maintains the AR Register.

Best for exchanges that want:

faster market entry,
a “bridge” while building their own AFSL application,
a compliance framework bundled by the licensee (at a price).

Key requirements ASIC focuses on

1) Organisational competence (Responsible Managers)

ASIC’s RG 105 is central: you must demonstrate organisational competence, typically via suitably qualified and experienced Responsible Managers (RMs) aligned to your requested authorisations.

2) “Digital asset perimeter” clarity

ASIC’s INFO 225 is designed to help businesses understand when their digital asset product/service is a regulated financial product/service.

Timeframes: CAR is faster, AFSL is slower (but strategic)

CAR timeframe (typical)

Often 2–6 weeks, driven mainly by the AFSL holder’s due diligence and onboarding process (not ASIC).

Fees ranging from $8,000 to $20,000 a month plus additional audit and compliance fees

Own AFSL timeframe (typical)

ASIC’s service charter targets decisions on 70% of complete applications within 150 days and 90% within 240 days.

In practice, your overall timeline is:

Preparation/build: usually weeks to a few months (scope, documents, RMs, financials)
ASIC assessment: typically months (especially if complex)

Costs: “rent an AFSL” vs owning your own

CAR / third-party AFSL provider (the “$10k per month” model)

Many crypto operators report costs around $10k/month plus additional fees (audits, variations, incident handling, additional reps, product approvals, etc.). At $10k/month that’s $120,000/year before extras.

Pros: speed, structure, reduced initial build burden
Cons: ongoing dependency, limited flexibility, contract risk (scope restrictions, termination triggers)

Own AFSL (upfront + operating)

There’s usually:

ASIC application fee (example: online body corporate AFSL application for certain categories is listed at $3,721).
Professional build cost (policies, proofs, RMs, governance)
Ongoing compliance operating cost (people/process, audits, reporting, AFCA membership if retail, etc.)

Worth it when: you expect to operate at scale for 12–18+ months and need control over approvals and product roadmap.

The 30 June 2026 no-action window (critical planning point)

ASIC issued a class no-action letter (29 Oct 2025) stating it does not intend to take action for providing financial services without an AFSL if (among other conditions) you lodge an AFSL application by 30 June 2026 covering those services.

Important limitations:

The no-action position does not apply to crypto lending/earn products, non-cash payment facilities (other than stablecoins), or derivatives (other than wrapped tokens).
To rely on parts of the no-action position, ASIC includes conditions such as having first provided services on or before 31 Dec 2025, and (for retail) being an AFCA member before lodging and remaining a member for a period. This is not a “free pass” it’s a transition posture with specific criteria.

Practical checklist: what to prepare now

If you’re a DCE/crypto exchange and licensing is on your roadmap, start here:

Define your model precisely (spot only, custody, staking, yield/earn, token issuance, wallet control)
Map activities to ASIC’s INFO 225 perimeter and obligations
Choose your pathway: CAR now, own AFSL now, or CAR → own AFSL
Lock in Responsible Manager capability (RG 105 alignment)
Set your internal deadline: if you intend to rely on ASIC’s transitional posture, treat 30 June 2026 as a hard lodgement planning date
Maintain your AUSTRAC DCE renewal discipline (every 3 years)

FAQs

Do all crypto exchanges need an AFSL today?

Not automatically. It depends on what you do and whether your activities involve a financial product/service under existing law. ASIC’s INFO 225 is the starting point for that assessment.

What’s the fastest way to get “licensed” for operations?

A CAR authorisation is typically the faster route because you operate under an existing AFSL holder’s licence framework. ASIC explains how authorised representatives are appointed and recorded.

How long does ASIC take to decide an AFSL application?

ASIC targets decisions within 150 days for 70% of complete applications and 240 days for 90%.

What is the “key representative” requirement?

In AFSL terms, ASIC expects you to demonstrate organisational competence through appropriately qualified Responsible Managers who oversee the financial services business (RG 105).

What’s special about 30 June 2026?

ASIC’s class no-action letter indicates ASIC does not intend to take action for unlicensed conduct if you lodge by 30 June 2026 and meet the conditions (plus scope exclusions apply).

If I’m a DCE with AUSTRAC, do I still need to renew registration?

Yes. AUSTRAC requires DCEs to renew registration every 3 years to continue operating.

Links:

Austrac VASP new definitions – click here

ASIC Info Sheet 225 – click here

Disclaimer

This article is general information only and does not consider your objectives, financial situation, or operational risk profile. It is not legal advice, financial advice, or a substitute for professional advice. Regulatory obligations depend on your exact product features, custody arrangements, client type (retail/wholesale), and how you operate in practice.

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