The Australian Securities and Investments Commission (ASIC) warns Australian investors to be aware of unregistered financial product providers. The ASIC said that citizens have suffered significant losses due to excessive leverage.
Authorities have begun providing warnings to individuals about unregistered crypto companies as crypto enters mainstream finance.
The ASIC urged Australian individuals to invest in crypto assets through financial institutions that have an Australian Financial Services license or an Anti-Money Laundering system, according to a statement made by the authority.
Investors across Australia have reported big losses after trading crypto financial products like options, futures, leveraged tokens, and binary options, according to the ASIC. The losses were linked to “high leverage, platform disruptions, or unjust liquidations,” according to the report.
Unlicensed crypto platforms on both sides of the border have also invested in features like geo-blocking and explicit warnings to help prevent enrolling Australians, according to the release. The Australian Securities and Investments Commission (ASIC) backed this decision, stating:
“Licensed entities are subject to a regulatory framework that aims to maintain the integrity, quality and reputation of the Australian financial system.”
Unlicensed enterprises can register with an external dispute resolution mechanism, such as the Australian Financial Complaints Authority, which will then allow Australian investors to lodge complaints, according to the ASIC.
Crypto’s “wild west” narrative, according to Blockchain Australia, a local advocacy group for the crypto and blockchain industries, is currently suffocating Australian crypto innovation.
The Australian group urged the Senate Select Committee on July 26 to create a regulatory framework for crypto firms and provide a safe harbour for them until legislation is enacted.
Spain’s National Securities Market Commission issued a similar warning against 12 unregistered crypto companies operating in the country just two days ago.
Crypto exchanges Bybit and Huobi were among those on the list, as they are not permitted to provide investment services in the country.
