Australian crypto ownership guarantees consumer protection, regulator says

Representations of cryptocurrencies in this illustration taken on January 24, 2022. REUTERS/Dado Ruvic/Illustration/

SYDNEY, Aug 11 (Reuters) – Almost half of Australian retail investors owned cryptocurrency at the end of 2021, and more got their information from YouTube videos than from financial advisers, the securities watchdog said on Thursday, calling the data a “strong case for regulation”.

The Australian Securities and Investments Commission (ASIC) survey of 1,053 retail investors, conducted last November, found 44% reported owning cryptocurrency, making it the second most popular investment after Australian shares.

A quarter of the investors surveyed who held cryptocurrency said it was their only investment.

The data will increase pressure on Australia’s new Labor government to emphasize consumer protection as it takes over a year-long study, started under the previous Conservative government, into whether and how to regulate the digital assets.

It also legitimizes widely circulated statistics about high levels of Australian cryptocurrency ownership, which last year were dismissed as “unlikely” by a central bank official.

The survey also found that 41% of respondents went to social media for investment information, with 20% naming Alphabet Inc’s ( GOOGL.O ) Youtube and 11% naming Meta Platform’s Facebook.

Only 13% got their information from a financial advisor or broker, according to the survey.

“We are concerned about the number of individuals investigated who reported investing in unregulated, volatile crypto-asset products,” ASIC chairman Joe Longo said in a statement.

“There is limited protection for investments in cryptoassets as they have become increasingly mainstream and are heavily advertised and promoted. There is a strong case for regulation of cryptoassets to better protect investors.”

Since the survey, interest rate hikes have spurred investors to abandon speculative assets, causing cryptocurrencies to fall and some crypto-related businesses to go bankrupt.

The survey was conducted in the same month bitcoin and ether, the two most popular cryptocurrencies, hit record highs. Both have fallen around two-thirds since then, while the Australian share market is down around 6%.

Reporting by Byron Kaye; Editing by Edwina Gibbs

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