Buyer Beware – Many Digital Assets are not “Financial Products”
Crypto investments and people raising money from the public for these types of investments are not always required or aware that they need to hold an Australian Financial Services License and therefore do not need to comply with a range of obligations including disclosure requirements (such as product disclosure statements) for retail clients.
What that means is potential investors are exposed to the risk of unregulated players and markets with a lack of consumer protection and a significant risk of financial loss.
While the government is making moves to regulate and develop the licencing framework around digital assets (see ASIC’s updated INFO 225), time will tell whether this will be effective in cracking down on the digital asset spruikers running rampant in the market.