AUSTRALIA CAPS BITCOIN CFDS AT 2:1 LEVERAGE — A CFD PAID OUT IN BITCOIN MAY SLIP OUTSIDE THE RULE — ASIC MOVES TO CLOSE THE GAP

Australia’s securities regulator, ASIC, opened consultation CS 64 on October 12, 2026 to extend its order on contracts for difference by 10 years and rewrite part of it. Under the 2020 instrument, a retail CFD on a crypto asset needs initial margin of “50% of the notional value of the CFD at the time of issue,” which caps leverage at 2:1. The order is due to expire on May 23, 2027. Comments close at 5 pm AEDT on November 9, 2026.

The change that matters is in the definition. The 2020 order covers contracts where, on termination, obligations “are settled in cash or by set-off between the parties.” The draft adds settlement “by transfer of digital assets.” ASIC’s release, 26-239MR, says some products “may fall outside the current PIO because of how they are settled.” It names no firm and gives no count. Some fixed-expiry crypto futures and options would stay outside the order.

ASIC’s case for the order is in its own numbers. Net retail losses fell 91% within six months of the original order, from A$372 million to A$33 million a quarter. Losses over the latest 12 months still topped A$458 million, A$73 million of it in fees. Commissioner Alan Kirkland: “CFDs continue to remain highly risky products.” Subject to ministerial approval, the extended order would run until 2037.

Start from what the product is. A 2:1 CFD is a loan against a price, and the rule caps the size of the loan. A contract that pays out in bitcoin instead of dollars is the same loan with a different receipt, so the regulator is fixing a word, not the risk. The trader who borrows against a price can still be closed out at the bottom. The bitcoin holder who paid in full and holds the coin has no margin call and no counterparty to answer to. At the time of this writing, bitcoin was $81,539.