Australian regulator issues warning about unlicensed crypto businesses
As crypto breaches mainstream finance, authorities have started issuing warnings to citizens against unregistered crypto businesses.
Joining this list today is the Australian Securities and Investments Commission (ASIC) as it warned Aussie investors to be wary of unlicensed entities that offer financial products.
In a statement released by the ASIC, the regulator advised Australian citizens to make crypto-asset related investments via financial institutions that hold an Australian Financial Services license or an Anti-Money Laundering mechanism.
ASIC said it had received reports from investors across Australia of citizens experiencing significant losses after trading crypto financial products such as options, futures, leveraged tokens and binary options. However, the losses were attributed to “excessive leverage, platform outages, or unfair liquidations.”
The announcement further highlighted that unlicensed crypto platforms across the border have also invested in features such as geo-blocking and explicit warnings to help prevent onboarding Australians. ASIC supported this move by stating:
“Licensed entities are subject to a regulatory framework that aims to maintain the integrity, quality and reputation of the Australian financial system.”
As a word of advice to crypto businesses, ASIC highlighted that unlicensed businesses can register with an external dispute resolution scheme like the Australian Financial Complaints Authority, which will then allow Aussie investors to lodge complaints.
Blockchain Australia, a local firm advocating for the crypto and blockchain industries, believes that crypto’s “wild west” narrative is currently stifling Australian crypto innovation. On July 26, the Australian association urged the Senate Select Committee to release a regulatory framework for crypto businesses and provide a safe harbor for such businesses until a legislation is established.
Just a day ago, Spain’s National Securities Market Commission issued a similar warning against 12 unregistered crypto businesses operating within its jurisdiction. The list included crypto exchanges Bybit and Huobi, which are not authorized to offer investment services in the country.