The Australian Securities and Investments Commission (ASIC) has increased the number of staff dedicated to cryptocurrency as high-profile collapses like FTX highlight the danger of the unregulated asset class.
Speaking at the Parliamentary Joint Committee on Corporations and Financial Services earlier this month, ASIC chair, Joe Longo, was asked by Senator O’Neill how FTX had been able to operate in Australia.
Longo pointed out that cryptocurrency was currently exempt from regulation, leaving it open to use as a vehicle for money laundering, data breaches and financial crime.
“The original attraction of this activity was that it appealed to the libertarian instincts of its promoters. Its great virtue was that it wasn’t regulated, and it wasn’t controlled by any government or central bank, and that it provided an opportunity for everyone to participate in a new and exciting activity.
“We now know that the emperor wasn’t wearing any clothes at all, and what was going on in FTX was appalling.
“So the first answer to your question is that our jurisdiction over this activity is very limited. Unless it’s a financial product, we don’t have any regulatory remit.”
Issues like FTX and the growth in crypto products, where Australia had the fifth-highest crypto adoption globally, had led ASIC to increase its coverage of the space. Crypto ownership in Australia was around 20%, higher than the global average of 14%, and around 4.1 million people owned crypto-assets, ASIC said.
Longo said: “If we step back, the crypto phenomenon crept up on us in quite a phenomenal way really, in the last two or three years in particular.
“I think it’s fair to say we’ve had a focus on crypto since at least the middle of last year. We’ve had a small and growing team who’ve been very interested in this topic, and we’ve been working with Treasury. Since it became seen as a big eight priority for us, that team has been expanded and formalised as a cross-ASIC capability.
“In terms of our capability in this space, within our resources, I think it’s really good and as good as can be reasonably expected in circumstances where we don’t even have a legislative mandate yet to regulate this space.”
Greg Yanco, executive director of the markets group at ASIC, added: “I think there are three people pretty much dedicated to crypto work, full time, but they’re supported by people from throughout ASIC. I think even the oversight group is around eight people just overseeing the work that we’re doing on crypto”.
