The chairman of ASIC, Joe Longo, speaking at a lunch in Melbourne on Tuesday, said ASIC’s focus would be on protecting people participating in the financial system” and guarding against consumer harms.
The head of the corporate watchdog says his job is to protect consumers and not be a “crypto cheerleader” as he warns against investing in what he describes as highly volatile, inherently risky assets such as Bitcoin.
It came a few days after the Albanese government announced it would begin “token mapping” in order to also seek to provide greater protections for Australian consumers. The Australian treasury and its treasurer, Jim Chalmers, announced a multi-multi-step plan to establish a cryptocurrency and digital assets regulatory framework that it claims will be more thorough and better-informed than those previously established “anywhere else in the world.”
Mr Longo said investors do not fully understand the significant risks inherent in crypto investments, lured in by slick marketing and the promise of high returns.
“It’s going to be very hard to regulate. To my mind, this is a highly risky, highly volatile activity, and you should be really careful before you [invest in] it.”
“It’s not my job to be a crypto cheerleader; my job is to protect consumers and administer the law,” Longo said. He noted there were lawful and beneficial uses of blockchain technology, but those should not be confused with bitcoin and other cryptocurrency investments.
Longo stated that cryptocurrency had been a “financial innovation full of promise, celebrity status and volatility” which had mooned in popularity with younger people in particular due to the promises of high returns and slick advertising. In recent months, he noted, the value of crypto assets had dropped by about $US2 trillion ($2.9 trillion).
“I think crypto has captured the imagination, particularly for the younger generation who see crypto in almost ideological terms as a method of investing that’s away from authority and government control, and they see that as an attraction.”
Continuing, Longo said “I think we are a long way from having global consensus on what to do about crypto,” he said.
“We will have to design a framework that suits us, that works within our existing legal and regulatory arrangements.”
Hopefully the government, RBA and Albanese government can carefully approach regulation. The associated FUD from Lingo isn’t kind, however, they all come around eventually!
