Australia’s securities regulator is keen to support the cryptocurrency industry despite fraud

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

During an April 22 panel discussion at Australian Blockchain Week, ASIC Commissioner Cathie Armour said the regulator’s goal is to work to “maintain, promote and improve the performance of the [Australian] financial system and the firms that operate within it,” while also ensuring “all investors and consumers have the confidence to participate in the system.”

“When we talk about new innovations like [DLT], or new products like various crypto-asset products, from our perspective at ASIC, we’re really interested in how these products can be used to improve the workings of our financial system.”

Armour highlighted one such innovation, noting that the Australian Stock Exchange plans to replace its CHESS clearing system with one based on a distributed ledger.

"We are spending a lot of time looking at proposals by the Australian Stock Exchange to change its clearing and settlement systems," she said.

Despite the regulator’s desire to work with the crypto asset industry, Armour stressed that ASIC receives a large number of complaints regarding crypto asset scams.

“As part of our job dealing with consumer issues and investor issues, we receive a lot of complaints when things don’t go well,” she said, adding:

“We know that this is likely to be a concern for everyone involved in the industry, as it is for us.”

Armour urged industry participants to alert regulators to “bad behavior or fraudulent activity,” noting that ASIC “looks to take action to disrupt bad practices in this industry.”

In March, ASIC warned that dating sites and apps have increasingly become venues for crypto-asset scams. “Beware of materials that suggest or pressure you to participate in ‘third-party’ cryptocurrency investments. Most crypto-asset investment opportunities reported to ASIC appear to be outright scams with no actual underlying investment.”

In June last year, ASIC warned of a rise in crypto asset scams amid the coronavirus pandemic, estimating a 20% increase in fraudulent activity overall between March and May 2020.