The Australian Securities and Investments Commission (ASIC) has cautioned the public to be careful of switching traditional retail and industry superannuation funds to self-managed superannuation funds (SMSFs).
The financial regulator warned of an increased incidence of scams in SMFSs, where fraudsters carry out complicated scams using crypto to lure inexperienced investors.
Superannuation has become an attractive target for scammers as they can leverage crypto to “boost” investors’ holdings before disappearing with them, ASIC explained.
The regulator said that anyone who wished to switch to a SMSF and invest in crypto assets should weigh the risks.
The regulator reminded investors that the agency has been encountering a growing number of scams involving crypto assets. In a similar vein, ASIC argued that anyone who wished to set up an SMSF should seek professional advice lest they face devastating financial consequences.
Then, ASIC added that even those who are successful by investing in crypto assets would need to tread carefully and ensure that they meet government criteria and regulatory norms to hold the assets.
The number of crypto scams worldwide has been increasing rapidly. In 2021 alone, crypto scammers managed to spirit away with $14bn worth of stolen cryptocurrencies. The amounts were calculated on the day the assets went missing and their historic price may have changed.
Meanwhile, Australia has been somewhat conflicted on crypto, like most other jurisdictions out there. The country is already considering several proposals to establish crypto regulation, although there has been no small amount of opposition.
ASIC has been warning investors for a while now whereas the central bank of Australia has been mostly opposed against crypto. As adoption of cryptocurrency intensifies, Australia’s regulators will need to settle on a framework.
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