Despite scams, the Australian securities regulator is keen to support the crypto industry

The Australian Securities and Investments Commission, or ASIC, has expressed a desire to support the crypto industry, noting the challenges associated with regulating innovative technologies.

As part of a panel at Australian Blockchain Week on April 22, ASIC Commissioner Cathie Armor described the regulator’s goals as “ working to maintain, facilitate and improve the performance of [Australia’s] financial system and the companies that operate in it, ‘while also ensuring that’ all investors and consumers have the confidence to participate in the system ‘.

“When we talk about new innovations such as [DLT], or new products such as various crypto asset products, from our perspective at ASIC, we are very interested in how those products can be used to improve the functioning of our financial system. “

Armor highlighted one of those innovations, pointing out the Australian Securities Exchange’s plan to replace its CHESS clearing system with a distributed ledger-based system.

“We spend a lot of time reviewing the ASX’s proposal to change its clearing and settlement system,” she said.

Despite the regulator’s desire to partner with the crypto asset industry, Armor highlighted the large number of complaints about crypto scams ASIC received.

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

“We know this is probably just as important to all of you participating in the industry as it is to us.”

Armor urged industry participants to warn the regulator about “bad practices or scams”, noting that ASIC “would like to take action to disrupt bad practices in this industry.”

In March of this year, ASIC issued a warning that dating sites and apps have increasingly become hosts to crypto asset scams: “Beware of profiles suggesting or pressuring you to participate in third party crypto investments. “Most crypto asset investment opportunities reported for ASIC appear to be outright scams with no actual underlying investment.”

In June last year, ASIC warned of an increasing prevalence of crypto asset scams amid the coronavirus pandemic, and estimated that overall scam activity had increased by 20% between March 2020 and May 2020.