The Australian Securities and Investments Commission (ASIC) has called on the Australian people to take precautions and equip themselves with knowledge of the risks associated with crypto asset investments.
Speaking at a Governance Institute conference on Sept. 12, ASIC commissioner Sean Hughes said the stock exchange regulator wanted new investors to be aware that investing in crypto assets was a form of extreme risk-taking.
“We want to be very clear and unambiguous in our messages to consumers entering the market,” he said.
“We think that crypto assets are highly volatile, inherently risky and complex.”
The commissioner also said that the ASIC would work with domestic and international agencies to disrupt and prevent harmful crypto products from targeting Australians.
The Australian Taxation Office estimated that over one million taxpayers in the country had gotten involved with crypto assets since 2018.
While more Australians are dabbling in cryptocurrencies, not many people are aware of the significant risks associated with digital assets.
Hughes told the Governance Institute conference that a survey of 1,000 active investors by the ASIC found that nearly half (44 percent) of the respondents held crypto assets. However, only 20 percent of those people considered their behaviour risk-taking.
He then said the survey findings were similar to other countries as an international study found that unfamiliar or unsophisticated investors in many parts of the world took extreme levels of risk when investing in crypto assets.
A sign displaying Bitcoins accepted is seen on the front door of the Old Fitzroy Pub in Sydney, Australia, on Sept. 19, 2013. (Cameron Spencer/Getty Images)
Meanwhile, there have been many instances of massive losses suffered by crypto investors this year due to the volatility of digital assets and scams.
In May, the global crypto market experienced a big crash, which wiped out around US$200 billion (AU$291 billion) in market value in 24 hours and caused many investors to lose their life savings.
In addition, the Australian Competition and Consumer Commission reported in June that Australians had lost $113 million to crypto investment scams so far in 2022.
Government Is Working on Crypto Asset Reforms
The ASIC commissioner’s speech came after the Australian government announced that it was working on crypto asset reforms.
In an official statement released in late August, the government said it was aware that regulations were falling to keep pace and adapt with the crypto asset sector.
According to the reform agenda, the treasury would first prioritise “token mapping” in 2022 to figure out the proper way to regulate crypto assets and related services.
After that, the government will develop a licensing framework as well as establish obligations for third-party …….