Australia Flags Crypto Oversight Gaps in 2026 Risk Assessment

• ASIC identifies regulatory gaps in digital assets and crypto services as a 2026 risk.
• Unlicensed advice and unclear oversight raise concerns for consumer protection.
• AI-driven scams and cyber threats add pressure to financial regulators.

Australia’s corporate regulator has identified gaps in cryptocurrency oversight as a key risk for 2026. The Australian Securities and Investments Commission outlined the concern in its latest financial system risk assessment. The review covers emerging threats linked to digital assets, artificial intelligence, and changes in market structure.

Crypto Oversight Gaps Highlighted

ASIC said regulatory gaps around digital assets, including cryptocurrencies, pose increasing risks to consumers and markets. The regulator noted that rapid innovation in crypto-related products and services has outpaced existing regulatory frameworks, leaving oversight unclear in some areas.

According to ASIC, these gaps have increased the risk of unlicensed financial advice, misleading conduct, and consumer exposure to products that operate on the edge of regulation. The regulator said this is particularly concerning for individuals unfamiliar with financial services who may not fully understand the risks involved.

ASIC added that while some crypto and fintech businesses currently operate outside regulation in a lawful manner, decisions on whether new product categories should fall under licensing regimes rest with the government. 

At the same time, the regulator warned that certain firms actively seek to remain outside regulatory boundaries, contributing to uncertainty and uneven consumer protections.

Related: Australia Moves to Modernize Crypto Rules With ASIC Stablecoin Relief

Digital Assets Part of Broader System Pressures

Crypto oversight concerns form part of a wider set of system-wide risks identified for 2026. ASIC said continued cost-of-living pressures, rising household debt, and ongoing geopolitical tensions are increasing volatility across Australia’s financial system.

The regulator also pointed to the expansion of private markets, including private credit, where retail investors now face lower investment thresholds and limited transparency. ASIC said constrained regulatory reporting outside the superannuation sector reduces visibility and increases potential risks for investors.

AI and Cybercrime Add to Regulatory Challenges

ASIC said advances in artificial intelligence are transforming financial services while also fueling a rise in AI-enabled scams and cybercrime. Consumers are increasingly exposed to automated decisions and AI-driven interactions that can exploit behavioral biases.

The regulator said reporting to the Australian Cyber Security Hotline shows rising cyber incidents, reinforcing concerns about data breaches, cyberattacks, and inadequate crisis management. Legacy systems, reliance on third-party providers, and more capable threat actors continue to elevate cyber risks across the sector.

ASIC urged companies and financial services license holders to strengthen risk management frameworks, test operational resilience, and address vulnerabilities linked to external service providers.

Superannuation and Consumer Harm Risks

ASIC also flagged operational failures in the superannuation sector as a major concern for 2026. Issues such as delayed claims processing, weak IT systems, cyber vulnerabilities, and fraud risks have led to financial harm and eroded trust in the system.

The regulator said the risks are growing as nearly three million Australians are expected to become eligible to access their superannuation over the next decade. More than A$750 billion is projected to move from accumulation into retirement during that period.

ASIC also raised concerns about aggressive marketing and standardized advice models that shift retirement savings into complex, high-risk investments. The regulator said it has multiple court cases underway linked to collapsed investment schemes and continues to work with government and consumer groups to address legal and regulatory gaps.

Related: Australia Mandates Licensing for Crypto Exchanges in $24B Regulatory Overhaul

Looking Ahead

The risk assessment also highlighted pressures on insurers following extreme weather events, risks tied to aging market infrastructure such as the CHESS system, and concerns around financial and sustainability reporting quality.

ASIC said identifying these risks helps guide its regulatory priorities for 2026, as it seeks to protect consumers and maintain trust, integrity, and confidence in Australia’s financial system.