As cryptocurrency continues to breach mainstream finance, authorities around the world have started issuing warnings to their citizens against investing with unregistered crypto businesses.
Joining the list of the authorities that are warning their citizens is the Australian Securities and Investments Commission (ASIC). The regulator warned Aussie investors to be wary of unlicensed entities that offer a variety of financial products.
In an official statement released by the ASIC recently, the watchdog advised the Australian citizens to make their crypto-asset-related investments through renowned financial institutions that have applied for and hold an Australian Financial Services license or an Anti-Money Laundering mechanism.
Based on reports acquired from Aussie investors, ASIC said that the citizens have already suffered considerable losses due to “excessive leverage, platform outages, or unfair liquidations.”
ASIC stated that it had acquired reports from investors throughout Australia of people losing after trading crypto financial products including futures, options, binary options, and leveraged tokens. Nonetheless, these losses got attributed to the massive outages and unfair liquidations and the regulator decided to take action.
The ASIC announcement also mentioned that unlicensed crypto platforms across the border have already invested in features like geo-blocking and explicit warnings to help in preventing onboarding Australians. ASIC supported the move by saying:
“Licensed entities are subject to a regulatory framework that aims to maintain the integrity, quality, and reputation of the Australian financial system.”
Coming as a word of advice to cryptocurrency businesses, ASIC said that all unlicensed businesses can register with an external dispute resolution scheme such as the Australian Financial Complaints Authority. This move will then enable the Aussie investors to lodge significant complaints.
Blockchain Australia is a local company that advocates for the cryptocurrency and blockchain sectors in the country. It believes that crypto’s ‘wild west’ narrative is now stifling Australian crypto innovation. The Australian association requested the Senate Select Committee on July 26 to create a regulatory framework for cryptocurrency businesses and offer a safe space for these businesses until a defined law is established.
On August 17, Spain’s National Securities Market Commission issued somewhat a similar warning against 12 unregistered crypto operators within its jurisdiction. This list included Bybit and Huobi crypto exchanges that are not licensed to offer any investment services within the country.