Joe Longo, the head of the Australian Securities and Investments Commission (ASIC), showed concern that many Bitcoin (BTC) and altcoin buyers do not comprehend the risks of investing in digital assets. He was surprised by the expanding number of crypto investors in Australia.
According to the ASIC report in August 2022, which surveyed over 1,000 retail investors in Australia, 44% of respondents stated that they owned cryptocurrencies, making them the second most common product type after Australian shares.
Alarmed by the new study, Longo noted on August 11 to the Australian Financial Review that ASIC was particularly worried about the lack of safeguards for investments in crypto-assets, considering that these assets are becoming increasingly mainstream and extensively being promoted.
On August 11, 2022, he also expressed his worry that consumers and investors do not entirely comprehend the dangers of this activity and what they are investing in. “It’s a highly speculative and hazardous industry, and I’m worried that customers who choose to invest in it should be informed that if they lose their money, there is nothing we can do to help them.”
Crypto regulations around the world. Image: ComplyAdvantage
Australian investors obtain financial data from social media.
41% of those questioned cited social media sites such as Facebook, TikTok, Reddit, and YouTube influencers as one of their primary sources of investing-related information, causing Joe Longo more anxiety.
Since the study was done a year ago, before the ASIC’s crackdown on financial influencers, the results hardly reflect the current state of affairs.
Other frequently mentioned sources of investing knowledge outside social media include Google searches (34%), investors’ networks such as family and friends (24%), and coworkers (10%).
Concerns about cryptography compel stronger regulation.
In February, Joe Longo expressed concern over the burgeoning popularity of crypto assets in Australia and the absence of legislation governing their purchase and sale.
With so many new investors participating in financial markets, the study enhances our understanding of retail investors and enables us to determine where regulatory action is necessary.
In addition, the ASIC chairman reassured investors that he is now working closely with the Australian government to create new legislation. It would tackle the problem of unregulated investment scams disguised as advice, one of the most popular sources of financial information today.