Australia’s financial watchdog head, Joe Longo, voiced concerns about the large number of people dipping their toes into the crypto market, especially during the coronavirus pandemic.
Longo, who chairs the Australian Securities and Investments Commission (ASIC), commented on a research conducted for 20 months from March 2020. The study surveyed 1,053 respondents and aimed to understand how Australians’ investment behavior during the COVID-19 plague.
Longo’s concerns emanated from the realization that 44 percent of the respondents held crypto bought during the pandemic. Twenty-five percent of the 44 percent revealed that crypto is the only investment in their portfolio. While crypto has a higher appeal among respondents, Longo is worried that most are unaware of the risk in crypto investments.
The research confirms Longo’s fears since only 20 percent “of cryptocurrency owners” entered the space with a risk-taking appetite. The ASIC chair is also concerned with few protections when investing in crypto. Longo suggests crypto regulations as the preferred approach to protecting small-scale virtual currency investors.
Senator Andrew Bragg agreed with Longo on regulations. Speaking to Cointelegraph, Bragg “recommended sweeping reforms to regulate crypto.” The senator added that the Australian government needs to enforce some regulations urgently.
Despite Longo and Bragg reading from the same page, Joni Pirovich, a crypto lawyer, observed that the securities regulator lacks adequate capacity to oversee activities in the cryptocurrency sector properly.
According to Pirovich, it’s unclear whether digital asset issuers are properly “supervised.”
She added that the Australian crypto market is complicated because token issuers tend to pass the burden to crypto trading platforms after a coin assumes public trading. Also, the presence of grey areas in the country’s crypto regulation efforts confuses players in the sector.