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Highlights
- ASIC says crypto investors are at their own risk at present.
- The crypto phenomenon, ASIC believes, is to stay in Australia.
- ASIC feels regulations for the crypto universe are essential to curb risk for investors.
Australian Securities and Investments Commission (ASIC) chair Joe Longo told investors to be careful while purchasing cryptocurrency products. He shared on Monday that many crypto assets presently are unregulated, leaving investors on their own. Though ASIC cannot eliminate all investor risks, it also cannot be ignorant of it.
ASIC’s regulations basket expands to Crypto and superannuation-
- ASIC was never responsible for consumer credit, financial services licences, cyber risk, or insurance claims handling. It was also not responsible for the superannuation industry.
- However, with the evolving landscape and interest in crypto-assets and superannuation funds to maintain & enhance its reputation, ASIC feels the need to regulate these markets.
- Many crypto-assets cannot be classified as 'financial products', thus making; investors bear all risks and exposures on their own.
- According to ASIC chair Longo, risk-taking and innovation are an essential part of Australia's financial system; however, a regulatory toolkit – to deter misconduct seems essential to him now.
Early November, Commonwealth Bank of Australia (ASX:CBA) broke its silence, becoming the first main-street bank to offer a platform to trade cryptocurrencies. Due to this, the ASIC believes that Crypto is already on the Australian economy's doorstep and is driving in straight from the investor demand push. However, the risks and implications for retail investors and consumers, ASIC believes, are potentially huge.
Bottom line-
At present, the Australian regulator is working with lawmakers to allow decentralised autonomous organisations (DAOs), governed by artificial intelligence, and a licensing regime for crypto exchanges. But, for now, crypto-assets remain unregulated and risky.
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