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ASIC’s New Corporate Plan: Cryptocurrency Investments

  • News
  • August 24, 2022
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Part of its actions will include raising public awareness about the risks inherent in crypto-assets and decentralized finance.

Australian Financial Controller, Australian Securities, and Investments (ASIC) has pledged to maintain encrypted assets and decentralized funds (DeFi) over the next four years.

According to ASIC’s newly published “corporate plan” published on August 22, the financial regulator said it will focus on “digitally enabled misconducts” as “emerging technologies and products change our financial ecosystem” as part of its four-year strategic plan which stretches to 2026. 

ASIC President Joe Longo said the regulator will focus on fraud and cryptography, “Our regulatory environment is changing and evolving — climate risk, our aging population, emerging data and digital technologies, and significant volatility in the crypto-assets market are all having a transformational impact.”

He noted that Scamwatch, a website that provides information to consumers and businesses about recognizing, avoiding, and reporting scams, received 4,783 reports of crypto investment scams and $99 million in reported losses in 2021.

ASIC’s actions “protect investors from harms posed by crypto-assets” and include supporting the development of an effective regulatory framework, implementing and monitoring a regulatory model for exchange-linked products, and raising awareness of the asset’s inherent risks. Assets and DeFi, among other activities.

August 23 Sydney reports Morning Herald warned to invest in Cryptocurrency, which described it as “a highly risky and highly volatile activity,” and consumers “should be really careful before you do it.”

“ASIC is not against innovation, and will do whatever it can to look for lawful ways of using the underlying technology, the distributed ledger, and blockchain technology, but that’s not to be conflated or confused with investing, inverted commas, in crypto assets.”

ASIC’s announcement came only days after Australia’s new ruling government announced plans to move forward with regulation of the crypto sector by conducting a “token mapping” exercise by the end of the year.

Cryptocurrencies and digital exchanges are only loosely regulated at the moment, with exchange operators only required to abide by Australian Transaction Reports and Analysis Centre’s (AUSTRAC) anti-money laundering laws and the general provisions of the Corporations Act.

The sector requires government legislation to reduce risks for investors and make cryptocurrencies a safe and established asset class.

 

However, there are thousands of crypto assets or currencies and Longo admits “regulation is coming” but “we will have to design a framework that suits us, that works within our existing legal and regulatory arrangements.”

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