Australian regulator warns against pension funds investing in high-risk” crypto assets – Regulation

An Australian regulator has warned residents who want to manage their own retirement savings against investing in cryptoassets that promise high returns in a short period of time. The regulator reiterates in the warning that crypto assets are a high-risk and speculative investment.

Fraudulent tactics

Australia's financial services regulator, the Australian Securities and Investments Commission (ASIC), has warned residents who manage their own pension funds to be wary of scammers using the lure of fast and high returns of crypto assets to defraud unsuspecting victims.

The watchdog added that pension fund members who “want to transfer the pension [retirement savings] from a regulated fund to a self-managed pension fund (SMSF)” should seek advice from a registered adviser before making the move.

In a public warning The ASIC, issued on January 17, 2022, also details some of the tactics used by fraudsters that Australians need to be on the lookout for. The warning reads:

Don’t rely on social media ads or online contacts from anyone promoting an “investment opportunity.” Be wary of cold calls, text messages or emails with a recommendation to transfer your super to an SMSF or invest in crypto assets through your SMSF.

For Australians who choose to manage their retirement savings personally, the watchdog reminds them of their responsibilities as well as the tax consequences that arise if they decide to invest in cryptocurrencies. The warning also emphasizes that only licensed financial advisers are better placed to help Australians looking to set up an SMSF.

Illegal transfer of funds

Meanwhile, the alert revealed that ASIC had made the decision to close an unlicensed services business. An example of the shutdown is A One Multi-Services in November after it accused the latter of unlawfully transferring $2.4 million to purchase crypto assets.

The warning stated: "ASIC has obtained interim and interim injunctions from the Federal Court in Queensland against A One Multi and its directors Aryn Hala and Heidi Walters to protect investors."

Meanwhile, the warning says scammed Australians can contact ASIC via its hotline or via the Internet.

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Terence Zimwara

Terence Zimwara is an award-winning journalist, author and writer from Zimbabwe. He has written extensively about the economic struggles of some African countries, as well as how digital currencies can provide an escape route for Africans.

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