ASIC cautions against mixing crypto with SMSFs

The Australian Securities and Investment Commission (ASIC) is warning consumers to watch out for an increase in marketing recommending they switch from retail or industry superannuation funds to cryptocurrency-focused self-managed superannuation funds (SMSFs).

The corporate regulator’s warning followed its move to shut down unlicensed Queensland financial services business A One Multi Services in November, alleging the firm had engaged in unlawful activity by transferring $2.4 million from A One Multi to buy crypto-assets.

ASIC also alleged that one of A One Multi’s directors, Aryn Hala, told investors that they would receive annual investment returns of over 20%.

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In its message to superannuation members, ASIC said it was best practice to seek advice from a licensed financial adviser before agreeing to transfer superannuation out of a regulated fund.

ASIC told members of the public to avoid relying on social media ads or online contact from someone promoting an ‘investment opportunity’ and to be wary of unsolicited correspondence from people advising to invest in crypto via an SMSF.

In October, ASIC released guidance on crypto-asset related investment products, providing advice on good practice on how to “admit and supervise” crypto products and how product issuers could establish and operate them.

ASIC said SMSF members must be careful to follow the rules governing investments the SMSF could make and taxation consequences for those investments, including cryptocurrencies.

“Any investment must be permitted under the fund’s trust deed and be in accordance with the fund’s investment strategy,” ASIC said.

“When developing and reviewing your investment strategy you need to document how your fund’s investments will meet your 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.”

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