ASIC chair plagued by large numbers of “risk-taking” crypto investors
The head of Australia’s financial regulator Joe Longo has sounded the alarm over the large amount of people investing in “unregulated, volatile” crypto-assets during the pandemic.
Longo, chairman of the Australian Securities and Investments Commission (ASIC) made the comments in a media release on Thursday for its research conducted in November 2021, which looked at investment behavior following the outbreak of the COVID-19 pandemic, saying:
“We are concerned about the number of people surveyed who reported investing in unregulated, volatile crypto-asset products”
The survey found that crypto was the second most common investment product, with 44% of respondents reporting that they held it. Of these investors, 25% indicated that cryptoassets were the only investment class in which they were involved.
Longo said the research highlights “the attraction of cryptoassets to the market” but that investors may not know the risk they are taking on:
“According to the survey, only 20% of cryptocurrency owners considered their investment approach to be ‘risk-taking’, raising concerns that investors did not understand the risks of this asset class.”
He added that considering there are “limited protections” for investors, the lack of understanding among retail investors “makes a strong case for regulating crypto assets to better protect investors.”
Opposition Senator Andrew Bragg agreed with Longo that there is a need for more regulation and for lawmakers to act quickly to protect investors. He told Cointelegraph:
“The city is right to identify this as a problem […] As the Senate inquiry’s leader, I recommended sweeping reforms to regulate crypto. The government should do some work and do it quickly.”
However, Australian digital asset lawyer Joni Pirovich told Cointelegraph that there has been confusion about whether ASIC is properly equipped to monitor token issuers and their tokens. She said:
“It is not that tokens are unregulated, rather that there is a gray area as to whether the token issuers are effectively regulated and monitored by regulators such as ASIC.”
Pirovich, who is a principal at Blockchain & Digital Assets – Services + Law, noted that in Australia, the issuance and trading of tokens creates an interesting conundrum for policymakers because once tokens are issued and then traded on the open market, it becomes a question of crypto . exchange:
“There is room for token exchanges to mature and develop best practice standards to better inform their customers as well, and policy reform should not stifle this.”
The ASIC executive’s remarks come as crypto trading is still not fully regulated in Australia, prompting some industry groups to clash with representatives at ASIC earlier this year.
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The Australian Securities and Investments Commission (ASIC) oversees financial activity in Australia and has taken over regulatory oversight of cryptocurrency investments in the country.
The ASIC survey collected its data from 1,053 Australian adults aged at least 18 who traded securities, derivatives or crypto between March 2020 and November 2021.
