ASIC chair raises concerns about crypto assets
The demand-driven nature of the rush into crypto assets has thrown up some unique challenges, Joe Longo, chair of the Australian Securities and Investments Commission said yesterday.
In a speech to the AFR’s Super & Wealth Summit, he said: “At present many crypto assets are probably not ‘financial products', making it difficult for financial advisers to offer counsel. So, what can they do when clients are banging down the door wanting to divert their savings into Ethereum or Dogecoin, a currency originally conceived as a joke?
“ASIC has already provided some guidance on exchange-traded funds linked to crypto assets – they at least are financial products and traded on a licensed exchange, so there will be some protections there – but for the most part, for now at least, investors are on their own.”
Longo said the crypto debate was no longer on the fringes of the financial services industry. “The fact Australia’s largest bank is already proposing a means of crypto-exposure for its retail customers is telling. Yes, it’s only a pilot project, but the overall direction is clear.”
He believed the implications for consumers were potentially huge.
“It is almost an article of faith that no-one should invest in something they don’t understand. Who among us can say they really understand crypto-assets and cryptocurrencies?
“In my view, consumers should approach investing in crypto with great caution. The maxim, ‘don’t put all your eggs in one basket’ comes to mind.
“Those here who are directly involved in the broader managed investments sector will understand the serious implications of investing without understanding. It is not an approach to be undertaken lightly."