Despite scams, Australian securities regulator keen to support crypto industry

The Australian Securities and Investments Commission wants to support the local cryptocurrency industry, despite receiving large numbers of reports about crypto scams.

The Australian Securities and Investments Commission, or ASIC, has expressed its desire to support the crypto industry, noting the challenges associated with regulating innovative technologies.

Speaking as part of a panel during Australian Blockchain Week on April 22, ASIC commissioner Cathie Armour described the regulator’s objectives as working to “maintain, facilitate and improve the performance of [Australia’s] financial system and the firms that operate within it,” while also ensuring that “all investors and consumers have the confidence the participate in the system.”

“When we’re talking about new innovations like [DLT], or new products like various crypto asset products, from our perspective at ASIC, we are really interested in how those products can be utilized to improve how our financial system operates.”

Armour highlighted one such innovation, noting the Australian Securities Exchange’s plan to replace its CHESS clearing system with a distributed ledger-based system.

“We are spending a lot of time looking at the ASX’s proposal to change its clearing and settlements system,” she said.

Despite the regulator’s desire to work with the crypto asset industry, Armour emphasized the high volume of complaints regarding crypto scams received by ASIC.

“As part of our job in dealing with consumer issues and investor issues, we receive a lot of complaints when things aren’t going right,” she said, adding:

“We know that this is probably a concern as much to all of you who participate in the industry as it is to us.”

Armour urged industry participants to alert the regulator about “poor practices or scam activity,” noting that ASIC “would like to take action to disrupt poor practice in this sector.”

In March this year ASIC put out a warning that dating sites and apps have increasingly become host to crypto-asset scams: “Beware of profiles that suggest or pressure you to participate in ‘third party’ crypto investments. Most crypto-asset investment opportunities reported to ASIC appear to be outright scams with no actual underlying investment.”

In June of last year, ASIC warned of an increasing prevalence of crypto asset scams amid the coronavirus pandemic, estimating that overall scam activity had increased 20% between March 2020 and May 2020.