ASIC targets crypto-settled derivatives with stronger retail protections

• Australia’s financial regulator has proposed extending retail CFD protections to qualifying derivatives settled through digital asset transfers.
• The proposal follows evidence that 68% of retail CFD traders lost money in 2023–24, with losses exceeding A$458 million.
• ASIC also wants to extend its existing protections for another 10 years, subject to ministerial approval.

The Australian Securities and Investments Commission (ASIC) has proposed extending retail CFD protections to certain derivatives settled using digital assets.

The proposal aims to apply existing consumer safeguards to products with CFD-like risks, including those settled through digital asset transfers.

“most retail investors lose money trading CFDs,” said ASIC Commissioner Alan Kirkland in a statement, highlighting the risks facing retail traders.

In 2023–24, 68% of retail CFD traders recorded net losses exceeding A$458 million, including A$73 million in fees.

ASIC also proposes clarifying margin requirements for options, preventing opposing positions from reducing initial margin, and tightening conditions for discounts and educational tools.

The existing intervention order limits leverage, requires standardised margin close-outs, protects clients against negative balances and prohibits certain inducements.

Introduced in March 2021, the order is due to expire in May 2027, while ASIC proposes extending it until 2037.

The proposal would extend existing retail safeguards to qualifying digital-asset-settled derivatives, with consultation submissions due by 9 November 2026.