Australian regulator warns about unlicensed crypto businesses

As crypto enters mainstream finance, government authorities have begun issuing warnings against unregistered crypto businesses.

Australian regulator warns about unlicensed crypto businesses

The latest name to join the list is the Australian Securities and Investments Commission (ASIC) as Australian investors are wary of unlicensed entities that are offering financial products.

ASIC advised Australian citizens to make crypto asset related investments via financial institutions that hold an official license or an Anti-Money Laundering mechanism.

The commission said it had received reports from investors across the country with the citizens experiencing significant losses after trading crypto financial products such as options, futures, leveraged tokens and binary options. However, the losses were attributed to “excessive leverage, platform outages, or unfair liquidations.”

The announcement further highlighted that unlicensed crypto platforms across the border have also invested in features such as geo-blocking and explicit warnings to help prevent onboarding Australians. The ASIC stated, “Licensed entities are subject to a regulatory framework that aims to maintain the integrity, quality and reputation of the Australian financial system.”

As a word of advice to crypto businesses, the commission highlighted that unlicensed businesses can register with an external dispute resolution scheme such as the Australian Financial Complaints Authority, which will then allow Australian investors to lodge complaints.

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