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The Australian Securities and Investments Commission (ASIC) has increased the number of personnel keeping an eye on the digital asset industry in the country. The Guardian reports that the decision to bolster its rank was predicated on the need to protect investors from the inherent risks of virtual currencies.

Greg Yanco, ASIC’s executive director for markets, said that the securities watchdog will not be “cheerleaders for crypto assets” and will be turning up the heat for the entire industry. 

Before the start of the year, ASIC barely put any effort into the digital assets industry, focusing its attention on the legacy market. The securities regulator had only one full-time staff in charge of virtual assets and added another employee to increase its capacity back in March. 

The widespread collapse of lending firms like Celsius and the implosion of platforms like Terra may have piqued the interest of ASIC to regulate digital assets as thousands of investors lost billions of dollars in the rout that plagued the markets. With the addition of more personnel, there is palpable fear that ASIC might consider Ethereum (ETH) as a security following the Merge event that sees the network transition to a Proof-of-Stake consensus mechanism.

Yanco claimed that ASIC is “technology agnostic” and that the body will do a great deal of work “to get to the bottom of how things are designed.”

Such a decision will bring the asset under the purview of ASIC and could have far-reaching consequences on the digital asset exchanges. Firstly, the exchanges will be left with the choice of either delisting ETH from their platform or choosing to subject themselves to tighter legislative scrutiny. 

Opting to play by the ASIC’s rule would mean that exchanges must have a minimum operating balance or proof-of-funds in reserve and might be forced to use third-party custody solutions to prevent clients’ funds from being reinvested in riskier assets. 

An avalanche of virtual currencies for Australian

ASIC disclosed that it was concerned by the rising number of Australians turning to digital assets for investment purposes. A recent study by SEC Newgate indicated that 44% of Australian retail investors held virtual assets in their portfolio and only 20% of respondents conceded that such an investment was a risk.

“If people are trading shares, suddenly they’re being offered crypto, and they’re beginning to think that they’re maybe not any riskier than share trading,” said Yanco.

He added that ASIC would waste no time taking enforcement action on any projects violating its rule. In the U.S., the Securities and Exchange Commission (SEC) has been actively clamping down on digital asset industry operators violating securities laws.

Watch: The BSV Global Blockchain Convention presentation, New Technologies, New Futures for Nations

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