Australia Eyes 2:1 Leverage Cap on Crypto Derivatives after $458M Losses

• Australian regulator seeks to extend CFD rules to crypto derivatives
• Proposal targets retail investor protection amid reported $458 million losses

On October 12, 2026 (UTC), CoinDesk reported that the Australian Securities and Investments Commission (ASIC) proposed regulations to extend leverage caps and negative balance protections to certain crypto-settled derivatives. ASIC introduced this plan to address rising retail investor losses and close regulatory gaps between cash-settled and crypto-settled leveraged products.

The proposal would require qualifying derivatives settled through digital asset transfers to comply with existing CFD (contracts for difference) limits and safeguards. The measures include imposing a maximum leverage cap—such as 2:1 for crypto CFDs—mandatory margin requirements, and protections that prevent clients from accruing negative balances.

ASIC stated that the intervention order would exclude specific cryptocurrency futures and options contracts with set expiry dates. The regulator’s targeted approach distinguishes between products that pose different levels of risk to retail investors.

ASIC estimated retail investors in Australia lost more than $458 million in the 2023–24 financial year trading derivative products. The regulator cited these losses as a primary motivation for the regulatory expansion.

The initiative aims to align protections for crypto-settled derivatives with those for traditional leveraged products, reducing systemic risks and closing loopholes in the current regulatory framework.