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1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errorsAustralia’s corporate regulator is proposing to bring certain digital-asset-settled derivatives under the same protections that apply to retail contracts for difference (CFDs). The move follows ASIC data showing that 68% of retail CFD clients lost money in 2023–24, with aggregate net losses exceeding A$458 million, including A$73 million in fees. That total covers retail CFD trading across the market, not crypto products alone.
What ASIC is proposing
The Australian Securities and Investments Commission (ASIC) released consultation paper CS 64 on 12 October 2026. It proposes extending the existing CFD product intervention order for another 10 years, subject to ministerial approval. The current order expires on 23 May 2027.
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Alongside the extension, ASIC wants to modernise the CFD definition. Products with the same economic characteristics and risks as CFDs would be covered even when they are settled by transferring digital assets, rather than by paying cash or netting the parties’ obligations.
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The products that would be captured
Under the proposed definition, a product would still need to have the usual CFD characteristics:
- Its value is derived from an underlying asset or reference value.
- It has no fixed termination date, or is normally terminated before any stated date.
- The holder can terminate the position.
- It is settled in cash, by set-off, or by transfer of digital assets.
This approach is intended to prevent firms from obtaining a different regulatory outcome simply by changing the settlement mechanism. A product that behaves like a CFD would receive CFD protections regardless of whether the final settlement is money, a net payment or a crypto-asset transfer.
Products that may remain outside the order
Some fixed-expiry crypto options and futures would remain outside the intervention order. ASIC is also asking for evidence on whether CFDs over options that can expose a retail client to losses greater than the premium should be prohibited or otherwise restricted. The consultation does not settle either question.
Why the A$458 million loss figure matters
ASIC says 68% of retail CFD clients made a net loss in the 2023–24 financial year. Aggregate net retail client losses exceeded A$458 million, and A$73 million of that amount was fees.
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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Repair Windows errors before they cause bigger problemsFix Now →The figure is frequently described as evidence of crypto-derivatives losses, but ASIC’s published number is broader: it covers Australian retail clients trading CFDs generally. It should not be read as a crypto-only loss total or as proof that every dollar was lost on digital-asset contracts.
ASIC Commissioner Alan Kirkland said the evidence shows the intervention order has materially reduced harm by addressing drivers such as excessive leverage. He also said CFDs remain highly risky and that most retail investors lose money trading them.
What protections apply now and under the proposal
The intervention order is designed to limit the ways leverage can turn a small price move into a large retail loss. ASIC’s comparison is:
| Issue | Current order | Proposed treatment |
|---|---|---|
| Settlement method | Generally covers CFDs settled in cash or by set-off. | Would also cover qualifying CFDs settled by transfer of digital assets. |
| Leverage | Limits leverage available to retail clients. | Leverage limits would continue for products brought within the modernised definition. |
| Margin close-out | Requires a standardised close-out process when account equity falls to the prescribed level. | The same standardised process would apply to qualifying digital-asset-settled products. |
| Negative balance | Protects a retail client from owing more than the money in the CFD account. | Negative-balance protection would extend to products newly captured by the definition. |
| Inducements | Bans certain bonuses, rebates and other inducements intended to encourage trading. | The ban would continue to apply where a digital-asset-settled product is covered. |
| Options and futures with a fixed expiry | Some products can sit outside the CFD order depending on their structure. | Some fixed-expiry crypto options and futures would remain outside scope; ASIC is seeking views on options that can create losses above the premium. |
The proposal would not make crypto derivatives safe or remove the possibility of losing the entire account balance. It would remove one route to avoiding protections, while the underlying market and leverage risks would remain.
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ASIC’s evaluation found that aggregate net retail client losses fell 91% within six months of the existing intervention. Quarterly losses dropped from A$372 million to A$33 million. ASIC also reported an 87% reduction in margin close-outs.
Those results are the main reason ASIC is seeking a long extension rather than allowing the order to lapse in 2027. They also explain why the regulator is targeting product classification: protections can reduce harm only when products with equivalent risks are inside the order.
How misclassification exposed crypto investors
A Federal Court case involving Binance Australia Derivatives illustrates the practical consequence of classification. ASIC said Oztures Trading Pty Ltd misclassified more than 85% of its Australian client base. Between July 2022 and April 2023, 524 retail investors were exposed to high-risk crypto derivatives without the protections that should have applied. The court ordered a A$10 million penalty.
ASIC’s January 2026 sector review also resulted in nearly A$40 million in refunds for more than 38,000 retail investors. The review prompted improvements in target-market determinations, onboarding questionnaires, reporting and monitoring. These actions sit alongside, rather than replace, the proposed rule change.
What happens next
Consultation deadline
Submissions on CS 64 close at 5 pm AEDT on 9 November 2026. ASIC will consider responses before deciding whether to make the proposed order.
Approval and commencement
The extension requires ministerial approval. The consultation does not establish the final wording, the exact list of products captured or a commencement date. Those details will remain unresolved until ASIC and the government complete the process.
What traders should check now
- Read the product’s legal terms to identify whether settlement is cash, netted or by digital-asset transfer.
- Check whether the contract has a fixed expiry and whether the holder can terminate it.
- Confirm the maximum leverage, margin close-out trigger and negative-balance terms.
- Treat bonuses, rebates and similar trading incentives as a warning sign, not as a reduction in risk.
- Do not assume that being labelled an option or future means the product is outside all retail protections; classification depends on its legal and economic characteristics.
Until a final order is made, the proposal is not law. Existing protections continue to apply according to the current order, while products outside its scope remain subject to the rules that currently govern them.
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