ASIC slams 'high risk' crypto assets in self-managed super

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The Australian Securities and Investment Commission (ASIC) has issued a warning urging self-managed super funds (SMSFs) to consider the risks of cryptocurrency investments.

In a public statement this week, the corporate regulator said that it had noticed an increase in marketing, recommending Australians switch from retail and industry superannuation funds to SMSFs so that they can "invest in a high return portfolio".

SMSF trustees are also being targeted to invest in crypto assets.

asic warning crypto smsf

Australians who decide to self-manage their super, ASIC said, should consider the risks before using their SMSF to invest in these types of investments.

"Superannuation is an attractive target for scammers, and crypto-assets are a high risk and speculative investment," ASIC said.

"It is best practice for superannuation fund members to seek advice from a licensed financial adviser before agreeing to transfer superannuation out of a regulated fund into an SMSF."

When developing and reviewing an investment strategy, ASIC said SMSF trustees need to document how their fund's investments will meet their retirement goals having regard to diversification, the risks of inadequate diversification, liquidity and the ability of the fund to discharge its liabilities.

"You must also be able to demonstrate that the fund owns the asset. The ATO website contains information about these obligations.

"A licensed financial adviser can assist you with formulating an appropriate investment strategy," ASIC explained.

ASIC said it is also important that consumers consider the risks before setting up an SMSF.

"Setting up an SMSF is one of the most significant decisions you can make relating to your retirement savings," it said.

"Before making the decision to set up an SMSF, seek advice from a licensed financial adviser."

In November 2021, ASIC moved to shut down unlicensed financial services A One Multi business located in Queensland.

The Gold Coast-based company appeared to be engaging in unlawful activity, with ASIC alleging more than $2.4 million was transferred from A One Multi to buy crypto-assets.

ASIC obtained interim orders and injunctions from the Federal Court in Queensland against A One Multi and its directors Aryn Hala and Heidi Walters to protect investors.

This article first appeared on Financial Standard

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Chloe Walker is a journalist at Financial Standard. She has a Bachelor's degree in journalism from QUT.

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