Australian Regulator Pushes for Rules to Protect Crypto Investors
The high percentage of
crypto ownership in Australia
with purchases on advice from YouTube and Facebook, makes "a strong case for regulation," according to the
Australian Securities and Investments Commission. The watchdog backs its stance
with poll results showing nearly half of retail investors in Australia keep one
coin or another.
ASIC believes there is "a strong case for regulation"
There is pressure on Australia’s new Labor government for consumer protection as it takes over a task from the preceding
conservative government to adopt a regulatory policy regarding digital assets
like cryptocurrencies. A year-long study initiated by the former cabinet is yet
to answer the relevant queries.
According to
a survey conducted by the Australian Securities and Investments Commission
(ASIC) in November, 44% of over 1,000 retail investors admitted to holding cryptocurrency.
The results indicated that crypto is the "second most popular investment
after Australian shares," Reuters noted in a report. A quarter of the
polled investors who held digital coins said they were their only investment.
Data suggesting high rates of cryptocurrency ownership in Australia was
dismissed by a top Central Bank official last year who referred to the numbers
as "implausible," the news agency reported. But ASIC believes they
make "a strong case for regulation."
Besides the
high popularity of crypto, is the revelation that 41% of respondents sought
investment insight online, with a fifth of those polled naming the video
sharing platform YouTube and at least one in ten indicating the leading social media
network, Facebook. Only 13% consulted a financial adviser or broker.
ASIC Chairman
Joe Longo expressed the Commission’s concerns about a large number of
participants in the survey who reported investing in what he described as
"unregulated, volatile crypto-asset products." Longo further elaborated:
"There
are limited protections for crypto-asset investments given they have become
increasingly mainstream and are heavily advertised and promoted. There is a
strong case for regulation of crypto-assets to better protect investors."
The survey
was conducted in the same month when bitcoin (BTC) and ether (ETH), the two
most popular cryptocurrencies, hit record highs, Reuter reports. The prices of
both coins have since dropped by about two-thirds, while the Australian stock
market is down about 6%.
The
popularity of crypto among Australian investors has attracted the attention of
other government agencies as well. Earlier this year, the Taxation Authority listed crypto-related profits among several priority areas
where efforts are needed to ensure correct reporting. The authority reminded
taxpayers that any capital gains from the sale of coins and tokens must be
calculated and declared with their tax returns.
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