Australia’s financial markets regulator is proposing to bring certain crypto-settled derivatives under the country’s existing retail contracts-for-difference protections, after reporting that retail CFD traders lost more than A$458 million during the 2023–24 financial year.
ASIC moves to close a regulatory gap
The Australian Securities and Investments Commission said on Oct. 12 that it wants to expand the scope of its CFD intervention rules. The proposed change would cover qualifying derivatives settled through digital assets, including products whose underlying exposure is linked not only to cryptocurrencies but also to traditional assets, interest rates or market indices.
CFDs are leveraged financial products whose value tracks an underlying asset without requiring the trader to own that asset directly. Under Australia’s current framework, CFDs are generally covered when they are settled in cash or through obligations offset between counterparties. Similar contracts settled by transferring digital assets may fall outside the existing product intervention order.
ASIC’s proposal is intended to make the economic characteristics of a product more important than the settlement method. In practice, affected brokers and derivatives platforms could face the same retail protections that apply to comparable cash-settled products.
The regulator’s move follows data showing the scale of losses in the wider retail CFD market. ASIC found that 68% of retail CFD clients lost money in the 2023–24 financial year. Combined losses exceeded A$458 million, including A$73 million in fees. Those figures cover CFDs across asset classes and do not represent losses from cryptocurrency derivatives alone.
Leverage, margin and investor protections
If the proposal is adopted, eligible digitally settled contracts could be subject to leverage limits, standardized margin close-out rules, negative-balance protection and restrictions on promotional incentives.
The applicable leverage limit would depend on the product’s underlying exposure and contractual structure. Retail CFDs referencing cryptocurrencies currently have a maximum leverage of 2:1, requiring investors to provide at least half the position’s value as initial margin. Other limits range from 5:1 for share-based CFDs to 30:1 for major currency pairs.
That means the proposal would not automatically apply the 2:1 cryptocurrency cap to every derivative settled through a digital asset. Some fixed-expiry crypto futures and options would also remain outside the proposed framework.
ASIC Commissioner Alan Kirkland said the existing restrictions had reduced investor harm, particularly by curbing excessive leverage. During the first six months after the protections began in March 2021, aggregate quarterly retail losses fell 91%, from A$372 million to A$33 million. Quarterly margin close-outs also declined 87%, although later reviews found that most retail CFD investors still lost money.
ASIC is also proposing to clarify how brokers calculate initial margin. A sector-wide investigation found that some firms offset customers’ opposing positions when determining collateral requirements. Under the proposed approach, the minimum margin would have to be calculated separately for each CFD, preventing one position from reducing the initial collateral required for another.
ASIC said its intervention into margin-netting practices resulted in 28 issuers refunding more than A$36 million to affected retail customers.
Options-linked CFDs and promotional offers
The regulator is seeking further evidence on CFDs connected to options, an area where losses have been especially widespread. ASIC found that 85% of retail clients trading options CFDs lost money in 2023–24.
The consultation asks for information about contracts that could leave traders responsible for losses greater than the options premium, including structures with potentially unlimited downside exposure. ASIC has not yet decided whether some of those products should face additional restrictions or be prohibited for ordinary retail investors.
The proposed measures would also impose tighter conditions on promotional discounts. Where discounts are permitted, they would need to be offered to retail customers on substantially equal terms and displayed prominently on brokers’ websites and trading platforms. Firms would have to retain records of qualifying offers for seven years after they ended.
ASIC also wants to ensure that educational and research tools are not used to encourage trading activity that is prohibited under the rules.
Consultation timeline and market picture
ASIC is seeking submissions from brokers, trading platforms and consumer groups by Nov. 9. Responses are expected to address which digitally settled products would be covered, the likely compliance costs and whether firms would need a transition period.
The current CFD intervention order is due to expire on May 23, 2027. ASIC is seeking a further 10-year extension, which would keep the protections in place until 2037 if approved by the Australian government. The regulator said the longer period would provide firms with greater certainty, while retaining the ability to withdraw the restrictions earlier.
The final scope could change during consultation. The proposed amendments therefore do not yet represent a completed set of obligations for brokers or derivatives platforms.
Moneyiar market data at the stated times showed mixed moves among the listed digital assets:
- Safe (SAFE) was priced at $0.1332427997, down 1.98% over 24 hours but up 14.61% over seven days, as of 2026-10-13 20:49 +03:30.
- RedStone (RED) stood at $0.1561263325, down 1.1% in 24 hours and 3.52% over seven days, as of 2026-10-13 20:48 +03:30.
- Loaded Lions (LION) traded at $0.0012743466, down 3.09% in 24 hours and 15.38% over seven days, as of 2026-10-13 20:49 +03:30.
- WOULD was priced at $0.0351412837, up 0.33% over 24 hours and 10.6% over seven days, as of 2026-09-22 21:04 +03:30.
The proposed Australian rules concern the structure and distribution of leveraged derivatives rather than the day-to-day price movements of individual digital assets. According to CryptoSlate, the consultation comes as ASIC seeks to apply protections consistently where products present similar risks to retail traders, regardless of whether settlement occurs in cash or digital assets.
