In Brief:
- ASIC will license the entity for it to provide financial services in Australia.
- Based on reports from Australian investors, the ASIC said that citizens have suffered significant losses due to “excessive leverage, platform outages, or unfair liquidations.”
The Australian Securities and Investments Commission (ASIC) has started issuing warnings to citizens against unlicensed crypto businesses.
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 noted that it has received reports from investors who have used unlicensed platforms to trade crypto-asset-related financial products. It includes financial services like options, futures, leveraged tokens and binary options. They have lost funds due to excessive leverage, platform outages, or unfair liquidations.
ASIC said: “ASIC understands that some unlicensed overseas platforms are taking, or have already taken, steps to prevent Australian clients from accessing these financial products.”
The 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.”
The ASIC advised crypto businesses that unlicensed businesses can register with an external dispute resolution scheme like the Australian Financial Complaints Authority. The authority will then allow Australian investors to lodge complaints.
Recently, Spain’s National Securities Market Commission issued a similar warning against 12 unregistered crypto businesses operating within its jurisdiction. The list also included two crypto exchanges, Bybit & Huboi.
