ASIC's Longo Commits to Action Against Certain 'High Risk' Crypto Products

The chairman of Australia's market regulator has warned that "action will be taken" against financial product issuers who promote risky products to a broad consumer base.

Australia's Financial Services and Markets Regulator has issued another glaring warning against issuers of crypto financial products, particularly those who improperly market high-risk products.

Joe Longo, chairman of the Australian Securities and Investment Commission (ASIC), said in a keynote address to ASIC's annual forum on November 3 local time that he would use existing laws to control "risky and complex products" in order to protect consumers.

He added, “Crypto and the crypto ecosystem continue to pose challenges and opportunities for regulators and policymakers,” saying the risks of investing in crypto are “often opaque,” the assets being "highly volatile, inherently risky and complex".

While his warning also encompassed non-crypto-focused companies, Longo specifically targeted issuers of crypto-based financial products, warning them if their offering did not pass ASICs:

"Too often, issuers seek to market high-risk, niche investment products, including in some cases crypto-based products, to a very wide range of consumers.

We are seeing issuers promoting high-risk products as suitable investments that will form a significant portion of an individual consumer's investment portfolio. This will not be tolerated and action will be taken," he warned.

Longo said ASIC continues to use rules promulgated in October 2021 for financial products to have stricter target market determinations (TMDs) and material transaction disclosures outside of those TMDs to control "risky, volatile and complex products".< /p>

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