ASIC Chair Is Troubled By Surge Of Risk-Taking Crypto Investors

ASIC chair is troubled by the surge of risk-taking crypto investors that have popped up in Australia as a result of the COVID-19 pandemic. What concerns the ASIC chair most is that a big number of these investors are young people and novice investors.

The sheer number of people who bought “unregulated, volatile” crypto assets during the pandemic has alarmed Australia’s financial services regulator chief Joe Longo.

ASIC Chair Is Troubled By Surge Of Risk-Taking Crypto Investors

The comments were given by Longo, the head of the Australian Securities and Investments Commission (ASIC), in a press release on August 11 for a study examining investment behavior after the COVID-19 pandemic that was carried out in November 2021.

“We are concerned about the number of people surveyed who reported investing in unregulated, volatile crypto-asset products”

According to the study, cryptocurrency is the second most popular financial product, with 44% of respondents saying they own some. 25% of those investors said they were exclusively active in crypto assets as a kind of investing.

According to Longo, the research shows the market attraction of crypto-asset, but investors might not be aware of the risks they are facing.

“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.”

The lack of knowledge among ordinary investors, he continued, makes a strong case for regulating crypto-assets to better protect investors, given the minimal protections that exist for investors.

Government Must Move Quickly To Remedy The Situation

Senator Andrew Bragg of the opposition party concurred with Longo that lawmakers must move quickly to protect investors and that additional regulation is necessary. He is reported as saying that as the Senate Inquiry Chair he recommends sweeping reforms to regulate cryptocurrency, stating that government should start working on the problem and do it fast.

However, according to Australian attorney Joni Pirovich, there is uncertainty on whether ASIC is adequately suited to supervise token issuers and their tokens. She uttered:

“It is not that tokens are unregulated, rather that there is a grey area about whether the token issuers are effectively regulated and supervised by regulators such as ASIC.”

Pirovich, the principal of Blockchain & Digital Assets – Services + Law, observed that in Australia, token issuance and trading present an intriguing problem for policymakers because, once tokens are produced and then exchanged on the open market, it becomes a matter for cryptocurrency exchanges.

The words from the ASIC chair come at a time when cryptocurrency trading is still not completely regulated in Australia, which caused some industry groups to clash with ASIC representatives earlier this year.

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