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Australian Regulators Warning Public about Crypto Businesses Operating Without Licenses

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Aug 19, 2021

With the passage of time, the mainstream industry is witnessing how the cryptocurrency industry is making its way into it. Among all sectors within the mainstream industry, the most prominent industry is the finance sector.

As the regulators have grown more concerned due to the cryptocurrency sector making its way into finances and the economy, they have started issuing warnings around cryptocurrencies.

From time to time, the regulators from different countries issue warnings for their local investors not to invest in cryptocurrencies. They continue reminding their locals about the volatility and uncertainty of cryptocurrencies.

The regulators want the local investors to stay vigilant when investing in cryptocurrencies, while their first advice to locals is not to invest in them at all.

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This time, it is the regulatory authority from Australia that has decided to go ahead and intimate its locals about cryptocurrencies. However, they have directed their concerns towards cryptocurrency firms that are operating in Australia without being registered or authorized.

The Australian regulatory authority has recently issued a warning where it has intimated its locals not to invest in cryptocurrency firms and businesses that are unauthorized. The regulator has made it clear that any cryptocurrency-related firm not registered through the regulatory authorities is unauthorized to operate in the country.

The Australian regulatory authority that has reportedly issued a warning is the Australian Securities and Investments Commission (ASIC). The warning issued by the regulator advises firms to be wary of investing in cryptocurrency firms or businesses that are unregistered to operate in Australia.

In the warning, the ASIC has advised the Australian citizens only to make investments through cryptocurrency firms that are authorized to operate in the country. The regulatory authority provided clear instructions that the citizens must invest through firms that have acquired Anti-Money Laundering mechanism or Australian Financial Services license.

The ASIC has also mentioned why it has felt compelled to issue a warning for its citizens. It has been confirmed that the reason for issuing the warning is the number of complaints they have received from local cryptocurrency investors.

According to the ASIC, several complaints have been lodged by cryptocurrency investors who have ended up losing their funds to businesses operating illegally in the country.

The investors have reported that they have experienced a significant amount of losses while trading in cryptocurrencies through such firms. The investors have reported that the majority of the time, they have ended up losing their funds in the form of binary options, leverage tokens, futures, and options trading.

The investors also revealed that most of the time, they lost their funds due to unfair liquidation, platform outages, and excessive leverage.

In the light of the above, the regulatory authority has intimated their locals not to invest in such firms.

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