Australia moves to pull crypto-settled derivatives under its leverage caps, after retail traders lost more than A$458 million in a year

Australia's markets regulator wants to close a gap in its rules for leveraged trading. The Australian Securities and Investments Commission said in consultation paper CS 64 that the definition of a contract for difference should cover contracts settled by transferring digital assets, not just cash, because they carry the same risks and should get the same protections. Commissioner Alan Kirkland said the aim is for protections to apply consistently regardless of how a CFD is settled.

The practical effect would be to extend the rulebook ASIC imposed in March 2021: caps on leverage, standardised margin close-outs, negative balance protection and limits on promotional incentives. For crypto CFDs the cap on retail leverage is already 2:1, against 5:1 for shares and 30:1 for major currency pairs, CryptoSlate reported. Some fixed-expiry crypto futures and options would stay outside the framework.

The regulator's case rests on the numbers. Within six months of the 2021 order, quarterly retail losses fell 91%, from A$372 million to A$33 million, and margin close-outs fell 87%. Yet in the most recent 12-month period retail CFD losses still topped A$458 million, including A$73 million in fees, and ASIC said its data repeatedly shows that most retail investors lose money trading CFDs. CryptoSlate, citing ASIC, said 68% of retail CFD clients lost money in the 2023-24 financial year. "CFDs continue to remain highly risky products," Kirkland said. In January 2026 ASIC secured nearly A$40 million in refunds for more than 38,000 retail investors over margin netting.

ASIC also proposes a ban on netting opposing positions to cut margin, tighter rules on discounts, and a question on whether options-linked CFDs that can lose more than the premium should remain available to retail clients at all. Brokers, platforms and consumer groups have until November 9 to respond. The current order expires on May 23, 2027; the ten-year extension would run to 2037 unless revoked earlier.