The head of Australia’s financial services regulator, Joe Longo has sounded the alarm over the large number of people who began investing in “unregulated and volatile” crypto assets during the pandemic.
Longo, chairman of the Australian Securities and Investments Commission (ASIC), made the comments in an Aug. 11 press release for its November 2021 investigation.which examined investment behavior after the onset of the COVID-19 pandemic, stating:
“We are concerned about the number of people surveyed who reported investing in unregulated and volatile crypto asset products.”
The survey revealed that cryptocurrencies were the second most common investment product, with 44% of respondents claiming to own it.. Of those investors, 25% indicated that crypto assets were the only investment class they participated in.
Longo said the research highlights “the attractiveness of crypto assets to the market” but that investors may not know what risks they are taking.
“According to the survey, only 20% of cryptocurrency owners considered their investment approach to be ‘risky’, raising fears that investors may 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 party senator Andrew Bragg agreed with Longo that more regulation is needed and that lawmakers act quickly to protect investors.. He told Cointelegraph:
“The president is right to identify this problem […] As chairman of the Senate inquiry, I recommended sweeping reforms to regulate cryptocurrencies. The government should work and work quickly.”
Nevertheless, Australian digital asset lawyer Joni Pirovich told Cointelegraph that there has been confusion over whether the ASIC is properly equipped to oversee token issuers and their tokens.. She said:
“It’s not that tokens are unregulated, but rather that there is a gray area as to whether token issuers are effectively regulated and supervised by regulators like ASIC.”
Pirovich, who is the director of Blockchain & Digital Assets – Services + Law, noted that In Australia, the issuance and trading of tokens creates an interesting conundrum for policymakers, because once the tokens are issued and then traded on the open market, it becomes a matter of crypto exchanges:
“There is room for token exchanges to mature and develop best practice standards to better inform their customers, and policy reform should not stifle this.”
The ASIC chairman’s remarks come as cryptocurrency trading is not yet fully regulated in Australia, which caused some industry groups to clash with ASIC representatives earlier this year.
The Australian Securities and Investments Commission (ASIC) oversees financial activity in Australia and has taken on regulatory oversight of cryptocurrency investments in the country.
The ASIC survey collected its data from 1,053 Australian adults aged 18 or older who traded securities, derivatives or cryptocurrencies between March 2020 and November 2021.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
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Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.