Login

Register

Login

Register

ASIC is toothless against crypto influencer scams, Senate hears | #socialmedia | #cybersecurity | #infosecurity | #hacker



Unlike stockbrokers, who must hold an Australian Financial Service Licence to promote investments, anybody can market cryptocurrency investments via social media channels and raise money with little more than a good reputation, the Committee on Australia as a Technology and Financial Centre heard on Friday.

“Insider trading or market misconduct prohibitions in Australia are tied to it being a financial product, but the characteristics of digital assets mean they are not defined as a financial product,” said Paul Derham, managing partner at Holley Nethercote Lawyers.

During the hearing, Mr Derham pointed to a US-based crypto influencer who promotes crypto tips to his 2.5 million Twitter followers, despite his lack of financial qualifications.

“Who knows if he was paid to recommend those coins, who knows if he loaded a file of his own coins before releasing his video, essentially insider trading the inevitable price rise generated by his post?” Mr Derham said.

As it stands, ASIC provides guidance on categories of managed investment schemes, derivatives, non-cash payments or securities.

Alex Saunders, an ex-pharmacist, founded Nugget’s News and became an ‘influencer.’ AFR

But legal experts warn the characteristics of cryptocurrencies – their changeable natures, their shifting code base, their capacity to act in a range of functions – mean they cannot be “wrestled” into one of these categories.

“It’s not people being lazy. It’s that the primary difference between digital assets and their forefather traditional assets is that digital assets change over time,” Ms Blycha said.

Often, cryptocurrencies have technical functions that extend beyond storing value or representing other assets, and they can be programmed to behave in certain ways should conditions in an environment change.

“There is a requirement that we actually change the law to be able to understand that the products themselves change,” Ms Blycha said.

The problem is an urgent one, as according to Independent Reserve, one of Australia’s largest cryptocurrency exchanges, 28 per cent of Australians now have exposure to cryptocurrency.

The lack of regulatory guidance has prompted legal professionals to seek a “safe harbour” to protect entrepreneurs experimenting and building with blockchain technology from future breaches.

“There are now billions of dollars invested in and transacted in digital currencies, and the lack of guidance and enforcement action from regulators has created a legitimate expectation within the community that it’s effectively unregulated and that’s okay,” said Joni Pirovich, director at the Digital Law Association.

“As soon as possible, we need a safe harbour for all of the innovation that has gone on to date, because any aggressive action from regulators now would put the digital asset market at systemic risk, and it will have consequential flow-on impacts into the traditional financial system.”

The Senate inquiry on Australia as a finance and technology centre also heard from Blockchain Australia, Singapore-based exchange Kraken, TCM Capital, Holon Global Investments and Mawson Infrastructure Group.

The Senate inquiry, chaired by Senator Andrew Bragg, is set to hand its recommendations to the government on October 30.



Original Source link

Leave a Reply

Shqip Shqip አማርኛ አማርኛ العربية العربية English English Français Français Deutsch Deutsch Português Português Русский Русский Español Español

National Cyber Security Consulting App

 https://apps.apple.com/us/app/id1521390354

https://play.google.com/store/apps/details?id=nationalcybersecuritycom.wpapp


Ads

NATIONAL CYBER SECURITY RADIO

Ads

ALEXA “OPEN NATIONAL CYBER SECURITY RADIO”

National Cyber Security Radio (Podcast) is now available for Alexa.  If you don't have an Alexa device, you can download the Alexa App for free for Google and Apple devices.   

nationalcybersecurity.com

FREE
VIEW