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Australian regulator says crypto investors 'on their own' for now

FILE PHOTO: Representations of cryptocurrencies Bitcoin, Ethereum, DogeCoin, Ripple, Litecoin are placed on PC motherboard in this illustration taken

By Paulina Duran

SYDNEY (Reuters) - Australia's corporate watchdog said on Monday it was working with lawmakers to develop rules for digital currencies but warned many crypto assets remained unregulated for now, leaving investors in such products "on their own".

In his first public comments since the country's largest bank unveiled plans to offer cryptocurrency trading, Australian Securities and Investments Commission (ASIC) chair Joe Longo told investors to be cautious buying products that had no protection.

"Consumers should approach investing in crypto with great caution," Longo told an Australian Financial Review Conference.

"At present many crypto-assets are probably not 'financial products' .... for the most part, for now at least, investors are on their own."

Earlier this month, Commonwealth Bank of Australia broke industry ranks by becoming the first main-street bank in the developed world to offer a platform for retail customers to trade cryptocurrencies.

"Crypto is on our doorstep, here and now, and being driven by extraordinary consumer and investor demand. The implications for consumers are potentially huge," Longo said.

The regulator said it was working with lawmakers who have proposed changing laws to allow decentralised autonomous organisations (DAOs), which are governed by artificial intelligence rather than a board of directors, and a licensing regime for crypto exchanges.

"ASIC does not strive to eliminate risk. But, nor should we ignore it," Longo added.

(Reporting by Paulina Duran in Sydney; Editing by Sam Holmes)