ASIC sees "significant number" of cryptocurrency scam concerns

The Australian Securities and Investments Commission (ASIC) is seeing an increasing number of complaints related to cryptocurrency scams, forcing it to deepen its understanding of blockchain technology.

Commissioner Cathie Armour told a Blockchain Week 2021 event that a challenge ASIC faced is how new products, particularly cryptocurrency assets, fitted within its current regulatory framework.

“We receive a lot of complaints where things aren't going right in the investor universe," she said.

“Just over the last little while, we have received a significant number of complaints about cryptocurrency scams.

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

Amour sought feedback and intelligence from industry players to enable it to take steps to weed out malicious actors operating in the sector.  

She argued that industry assistance to help ASIC understand the best approach to tackling digital currency issues was needed for better and faster progress.

ASIC senior regulatory policy professional Hema Raman agreed, calling the cryptocurrency space an “evolving area.”

“We're very open to learning about the cryptocurrency space,” Raman said.

“We're very conscious that it's hard to get on top of specific issues to the level of detail that's required to help specific business propositions be implemented.

“It's important to take the opportunity to acknowledge that the industry is [also] keen for more specific guidance, and where we’re caught is the uncertainty around regulatory perimeters.

“We need to make the observation that cryptocurrency assets aren’t a homogeneous asset class that we can identify consistent principles across the board that would apply to them in a generic sense.

“That is one of the barriers to us providing even more detail.”

Raman said ASIC has seen business propositions around exchange-traded products that hold cryptocurrency assets, but said that such arrangements needed to be vetted carefully.

“In exploring this, we identified that the market operator regime that’s in place in Australia is yet to identify what’s the appropriate minimum standards that facilitate cryptocurrency assets," Raman said.

“That raises quite a lot of questions that need to be brought through around the reliability pricing underlying cryptocurrency assets that trade on multiple digital currency exchanges.”

Raman added industry support will also play a key part in how consumers are educated on potential scams that reach beyond ASIC.