The Australian Securities and Investments Commission (ASIC) quite literally entered the chat. A WhatsApp group chat with almost 300 “small investors” received a message from the watchdog after it had somehow accidentally been added to the chat. The group’s entire conversation, which involved potentially illegal market tip-offs, triggered the watchdog to send a message of warning about breaking the law, and that some individuals might already be under investigation. While initially thought to be fake, it was later confirmed that it was actually a representative of ASIC who sent the warning. But what is ASIC?
The Australian Securities and Investments Commission (ASIC) acts as a corporate watchdog and is Australia’s integrated corporate, markets, financial services and consumer credit regulator.
According to ASIC, some of the body’s responsibilities include:
- Promote confident and informed participation by investors and consumers in the financial system
- Maintain, facilitate and improve the performance of the financial system and entities in it
- Administer the law effectively
- Make information about companies and other bodies available to the public as soon as practicable
ASIC and the rise of ‘finfluencers’
One particular area ASIC publicly addressed last month was the rise of ‘finfluencers’ — social media influencers that promote certain cryptocurrencies (or offer any financial advice through paid or non-paid promotion). Often the influencers are paid in the coin they are promoting. ASIC launched a review into several of those influencers, saying “we are currently undertaking a review of selected financial influencers to understand their business models and how the financial services law applies to this activity.”
“Our selection of finfluencers is not targeted specifically at TikTok, although it is being included in the review as we note that some of the finfluencers have a presence on TikTok.”
This comes after the Australian Competition and Consumer Commission (ACCC) found in August that Australians had lost more than $35 million in cryptocurrency scams in just six months. The report further found there was a 119.6% increase in the losses associated with investment scams between the first six months of 2020 compared with the first six months of 2021.