<\/p>\n
The Australian Securities and Investments Commission (ASIC) is intensifying its focus on the distribution of \u201chigh-risk\u201d over-the-counter derivatives to retail clients, including crypto derivatives.<\/p>\n
According to a report titled \u201cDesign and Distribution Obligations: Retail OTC Derivatives,\u201d the regulator is concerned about issuers offering unregulated digital assets alongside regulated financial products.\u00a0<\/p>\n
The report<\/a>, published on Tuesday, states that such a practice risks confusing retail investors, who may wrongly assume the same consumer protections apply to both regulated and unregulated products.\u00a0<\/p>\n It follows last month\u2019s lawsuit by the regulatory against trading platform eToro<\/a>, alleging violations in design and distribution requirements related to its CFD offerings, which have allegedly resulted in substantial losses for retail investors.\u00a0<\/p>\n \u201cWe are closely monitoring offers to retail investors of high-risk crypto-linked products that constitute financial products or the provision of financial services,\u201d ASIC said in its report. \u201cRetail investors may also underestimate the risks.\u201d<\/p>\n ASIC\u2019s Deputy Chair, Karen Chester, expressed the regulator\u2019s dissatisfaction with how issuers, especially those dealing in crypto derivatives and CFDs, are adhering to design and distribution obligations.\u00a0<\/p>\n \u201cWe will not hesitate to take further action, from stop orders through to court proceedings, especially where we see egregious failures,\u201d Chester said in a statement.<\/p>\n A CFD is a contract between an investor and a broker to exchange the difference in the value of an asset between the time the contract is opened and closed. CFDs are typically used for speculative trading and hedging.<\/p>\n ASIC sought an intervention<\/a> into such products three years ago when it imposed conditions on their issuance and distribution in an attempt to strengthen retail consumer protections.<\/p>\n Those included limiting the leverage retail clients can use for CFDs to just 2:1 for crypto, meaning for every dollar the retail client has in their trading account, they can only take a position up to twice that amount.<\/p>\n Get the day\u2019s top crypto news and insights delivered to your email every evening.\u00a0Subscribe to Blockworks\u2019 free newsletter<\/a>\u00a0now.<\/strong><\/p>\n Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can\u2019t-miss tweets and more from\u00a0Blockworks Research\u2019s Daily Debrief<\/a>.<\/strong><\/p>\n Can\u2019t wait? Get our news the fastest way possible.\u00a0Join us on Telegram<\/a>\u00a0and follow us on\u00a0Google News<\/a>.<\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" The Australian Securities and Investments Commission (ASIC) is intensifying its focus on the distribution of \u201chigh-risk\u201d over-the-counter derivatives to retail clients, including crypto derivatives. According to a report titled \u201cDesign and Distribution Obligations: Retail OTC Derivatives,\u201d the regulator is concerned about issuers offering unregulated digital assets alongside regulated financial products.\u00a0 The report, published on Tuesday, […]<\/p>\n","protected":false},"author":2,"featured_media":150900,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[230,225,221,227,226,228,229,60,223,224,222],"class_list":["post-150899","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-brave","tag-coinbase","tag-crypto","tag-decentralised","tag-decentralized","tag-decentralized-exchange","tag-erc-20","tag-featured","tag-meme-coin","tag-robinhood","tag-solana"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/150899","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=150899"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/150899\/revisions"}],"predecessor-version":[{"id":150902,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/150899\/revisions\/150902"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/150900"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=150899"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=150899"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=150899"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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