Australian Regulator Says Cryptos ‘Created Out of Nothing,’ Issues Fresh Warning, Report

Last updated: November 23, 2023 22:29 EST
. 2 min read

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The Australian Securities and Investments Commission (ASIC) is reportedly ramping up its surveillance towards the crypto market introducing fresh warnings.

The regulator on Friday issued warning on cryptocurrency investments criticizing the digital tokens as “created out of nothing.” ASIC chair Joseph Longo also slammed the beleaguered Binance exchange and its CEO Changpeng Zhao over its unclear structure.

“It’s basically created out of nothing, out of the ether – it’s basically computer code.”

Per a report by an Australian daily, ASIC issued strict crypto warnings and would tighten its cryptocurrency laws by 2025. A new legislation, paying attention to the risks of cryptos will be introduces soon, it said.

“The whole crypto story to my mind remains one that we should be very, very, very cautious about,” Longo said.

He also stressed that many digital tokens are not traded in a way which isn’t transparent and the processes are opaque.

Further, Longo also raised concerns on those investors who can’t afford to lose their money on cryptos. “But I do worry about people who think that it’s an activity that you could equate with superannuation or having a mortgage or buying some property.”

Longo added that cryptos remained on AISC’s radar with four legal cases currently underway.

“My key message remains: be careful before you put your money into crypto,” he warned. “The other reason I worry about crypto is that you can trade crypto anywhere in the world.”

The warning and the new legislation on cryptos come at a time when 906,000 Aussies said that they are likely to enter the crypto market for the first time in next 12months, according to Australian Digital Assets Survey, 2023.

Longo further said that once the legislation passes the parliament, ASIC will get extra funding to tackle crypto.

Binance is “Opaque”

Furthermore, Longo mentioned the opaque and unclear structure of Binance as the exchange faces trouble with the US Securities and Exchange Commission (SEC) and the recent stepping down of its CEO CZ.

“I mean, look at Binance – where are they based? We still don’t know. So, what am I dealing with?”

According to ASIC deputy chair Sarah Court, crypto regulations in Australia has two factors – design and ways to enforce it.

“Crypto has been a really critical part of the enforcement that we’ve been doing this year,” she noted. “If we see misconduct though that raises significant issues in the same way as these other cases then absolutely we will continue to prioritize and take enforcement action.”