ASIC Urges Australians to Be Wary of Unlicensed Cryptocurrency Derivatives Providers

The Australian Securities and Investments Commission (ASIC) today issued a notice, urging Australians to be wary of investing in crypto-asset related financial products through unlicensed entities.

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According to the official announcement, ASIC has received a number of reports from Australians who have used unlicensed platforms to trade crypto-asset related financial products, such as options and futures, and have experienced significant losses due to excessive leverage, platform outages, or unfair liquidations.

ASIC highlighted that an entity is required to be licensed by ASIC if they provide financial services (such as advising or dealing) in relation to financial products offered in Australia. Financial products include derivatives such as options, futures, leveraged tokens and binary options.

“some unlicensed overseas platforms are taking, or have already taken, steps to prevent Australian clients from accessing these financial products,”the regulator stated.”These steps include removing references and links, placing additional warnings and disclosures on the relevant webpages and apps, and introducing geographically based IP restrictions. This prevents more Australian consumers from accessing financial products provided by the unlicensed platform.”

In April, ASIC has has decided to ban the sale of binary options​ to retail traders in Australia. The commission mentioned that binary options are likely to result in cumulative losses to retail clients because of their product characteristics.