In the middle of the growing crypto adoption by institutions around the world, regulators Australia warned residents against investing their retirement funds in the industry.
The Australian Securities and Investment Commission (ASIC) made this known in a publication posted on its website.
Don’t invest your retirement funds in crypto – ASIC
The warning became necessary due to several advertisements and marketing telling Australians to opt for Self-Directed Superannuation Funds (SMSF) to invest in high yield portfolios instead of the usual Australian superannuation funds. industry and retail that are common in the country.
The administrators of the pension fund being advised to invest in cryptocurrencies such as Bitcoin, ASIC called on pension fund members to beware of crypto scams.
In the statement, the commission stressed that creating a self-managed super fund is not something to be done based on social media marketing and online investment opportunities. He called on anyone considering setting up an SMSF to first seek advice from a licensed financial adviser.
The ASIC further described the risks of investing in crypto assets. He said anyone who creates an SMSF would be personally responsible for every decision and compliance, even if they rely on the advice of others. He was referring to previous posts on crypto scams and other relevant investment advice.
Why the regulator issues a warning note
ASIC’s release is not surprising, given the importance of retirement savings to the overall economy. Beyond the social safety net that these funds provide to workers, they are important for the financial sector.
Retirement savings represent a significant percentage of funds invested in the capital market. This means that people who self-manage their funds and put them into crypto will reduce the amount of money available for investment in the traditional financial sector.
Beyond that, the risks of crypto investments mean that investing in retirement funds can hurt economic growth if those investments don’t go as planned. Several countries are already trying to regulate the crypto industry, either directly or indirectly.
In the UK, the Advertising Standards Authority has ban multiple crypto ads to mislead or not provide sufficient information. International agencies such as the IMF have also called for consistent global crypto regulations.