ASIC Issues Warning for Aussies Investing in Crypto via Unlicensed Entities

ASIC has issued a warning against investing in crypto-asset-related financial products, such as options and futures, through unlicensed entities.

August 18, 2021, | AtoZ Markets – The Australian Securities and Investments Commission (ASIC) on Wednesday has issued a warning to investors in the country to be careful when going through unlicensed entities to invest in crypto-asset-related financial products like options and futures.

ASIC noted that it has received reports from investors having used unlicensed platforms to trade crypto-asset-related financial products and losing funds due to excessive leverage, platform outages, or unfair liquidations.

ASIC understands that some unlicensed overseas platforms are taking, or have already taken, steps to prevent Australian clients from accessing these financial products. These steps include removing references and links, placing additional warnings and disclosures on the relevant webpages and apps, and introducing geographically based IP restrictions (geo-blocking). This prevents more Australian consumers from accessing financial products provided by the unlicensed platform, the Australian watchdog said.

ASIC reminded that authorized entities provide investors with certain protections and urged investors to check if the entity they are dealing with holds an AFS or AML license.

Read also: ASIC Issues Warning Against 3 Unauthorized Brokers in Australia

ASIC authorization is required for the provision of financial services and offering financial products such as options, futures, leveraged tokens, and binary options. As a reminder, ASIC has used its newfound product intervention powers to ban the sale of “binary options” to retail investors for 18 months after which, the ban may be extended or become permanent.

Think we missed something? Let us know in the comment section below.

Share Your Opinion, Write a Comment