ASIC Warns against Trading Cryptos on Unlicensed Exchanges.


  ASIC Warns against Trading Cryptos on Unlicensed Exchanges.

  It urged investors to check if the platforms have an AFS license or AML.

  The Australian Securities and Investments Commission (ASIC) has become the latest financial market regulator to ring the warning bell against the unlicensed cryptocurrency venues. According to a notice published on Wednesday, the regulator has cautioned Aussie investors who are investing in crypto-related financial products and services on platforms that do not hold an Australian Financial Services (AFS) license.

  “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,” the regulator clarified.

  The ASIC warning further specified the risks of investing crypto futures and options on offshore platforms, which attracts traders offering high leverages. It detailed that many Australian investors have experienced losses while investing in these platforms due to excessive leverage, platform outages or unfair liquidations.

  Regulators Are Moving against Unlicensed Crypto Entities

  ASIC tightly regulates the Australian financial services industry and is deemed to be one of the reputed regulators. Earlier this year, it put a limit on the maximum leverage level that can be offered by any regulated entity to mitigate the risks of retail investing.

  Though the notice did not name any unlicensed crypto entity, most of the major global crypto derivatives platforms do not hold an ASIC license.

  Meanwhile, several other regulators are pointing to the unlicensed operations of crypto platforms, while some are even taking enforcement actions. Most recently, the Spanish regulatory agency flagged 12 companies including two top crypto exchanges Bybit and Huobi, while more than a dozen regulators warned against the top crypto spot and derivatives platform, Binance.

  “ASIC understands that some unlicensed overseas platforms are taking, or have already taken, steps to prevent Australian clients from accessing these financial products,” the Aussie regulator added.

  “These steps include removing references and links, placing additional warnings and disclosures on the relevant webpages and apps, and introducing geographically based IP restrictions (geo-blocking). This prevents more Australian consumers from accessing financial products provided by the unlicensed platform.”


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