Australia: Crypto Became Popular, Requires Stricter Regulation

While the popularity of digital assets rises in Australia among investors, risk awareness does not.

Australia: Crypto Became Popular, Requires Stricter Regulation

Seeing that the number of Australian crypto investors grows, the Australian Securities and Investments Commission (ASIC) chairman Joe Longo shared his concerns about the lack of risk awareness when investing in digital assets. ASIC's latest report, published in August 2022, states that out of over 1,000 retail investors, 44% of them invest in digital assets, making it the second most common product type in the financial market in Australia. Based on the August report, Mr. Longo said the following to the Australian Financial Review:

“ASIC is also concerned that there are limited protections for crypto-asset investments given they have become increasingly mainstream and are heavily advertised and promoted.”

Mr. Longo also notified Sydney Morning Herald:

“My concern is that consumers and investors are not fully understanding the risks of this activity and (…) not fully understanding what they’re investing in as well <…> It’s a very speculative, risky activity, and I’m concerned that consumers who wish to invest in this need to be very clear that if they lose their money, there is very little we can do about getting it back.”

Further concerns rose due to roughly 41% of those interviewed for the research, who acquired their information about crypto from social media platforms such as Reddit, TikTok, Instagram, and Facebook, and some of them acquired information from “Financial Influencers” via YouTube. Yet this survey was concluded last year, before the ASIC’s crackdown on finance social media influencers, making this data rather irrelevant. Likewise, some people used Google Searches, coworkers, family members, and friends as sources for their investment information.

“With so many new investors active in financial markets, the research builds on our understanding of retail investors and helps us consider where our regulatory efforts are warranted.” — Joe Longo the chairman of ASIC said in February 2022

Thus, in Australia, the rising popularity and lack of proper regulations on selling and buying digital assets lead to further concerns. Although the ASIC chairman assures, that he is working closely with the Australian government on the creation of new regulations that will spread risk awareness, prevent further unregulated investment scams, and help prevent unprofessional investment advice.

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