Super funds are cryptocurrency scam targets, ASIC warns

Cryptocurrency giants bitcoin and Ethereum are down 30 per cent since November, but it hasn’t stopped super funds being targeted, financial regulator ASIC says.

Bitcoin banknote and coin imitations. Picture: Ozan Kose/AFP

Editor's Note – 16 May 2023   Following publication of this article, on 1 March 2023 Ms Walters was released from preservation orders previously obtained by ASIC and the Federal Court proceeding has been discontinued against her.

The nation’s financial watchdog is warning Australians to beware of a push for people to ditch their existing superannuation for a self-managed fund to invest in high-risk cryptocurrency assets.

There has been an increase in marketing recommending people switch from industry and retail super funds to SMSFs, the Australian Securities and Investments Commission says.

“SMSF trustees are being targeted to invest in crypto-assets, or cryptocurrencies … superannuation is an attractive target for scammers,” ASIC said.

Australians hold more than $3.4 trillion in superannuation, including more than $860bn in SMSFs.

“Do not rely on social media ads or online contact from someone promoting an ‘investment opportunity’,” ASIC said.

“Be wary of people cold calling, text messaging, or emailing you with a recommendation to transfer your super to an SMSF, or invest in crypto-assets via your SMSF.”

ASIC’s warning comes as established crypto firms spend big bucks on advertising, with movie star Matt Damon promoting Crytpo.com on television and the company this week announcing a big deal to sponsor the AFLW.

SMSF Association John Maroney says consider the risks. Picture: Kelly Barnes

SMSF Association CEO John Maroney said he had noticed an increase in crypto marketing but not specifically targeting SMSFs.

“However, we are aware of an increase in the number of scams involving crypto-assets which was one of the reasons last year we launched our scam awareness web page,” he said.

Mr Maroney said the latest ATO data, from 2019, showed crypto represented less than 0.1 per cent of SMSF assets, and while it had grown significantly since then the overall amount invested was still “very small”.

“Before investing in crypto assets, SMSF trustees and members need to consider the level of risk of the investment and ensure the investment is consistent with the fund’s investment strategy and the SMSF’s trust deed,” he said.

“It is difficult to see how investing in a single crypto asset would satisfy the requirements of a properly formulated investment strategy.”

Mr Maroney recommended seeking professional financial advice but he noted that many advisers were not permitted to advise on crypto assets.

Catapult Wealth director Tony Catt said crypto’s marketing push was “attempting to make it mainstream” but it was still far from mainstream in terms of secure investment platforms and transactions.

“Are they trying to buy credibility?” he said.

“It’s a very immature industry.”

Catapult Wealth director Tony Catt says crypto is still an immature industry.

Mr Catt said crypto was much broader than its big guns of bitcoin and Ethereum, and he knew of people who had been scammed tens of thousands of dollars.

“If you look for horror stories you will find them, and that doesn’t happen in other mainstream markets,” he said.

“Ask a lot of questions and be very careful.”

“Most super funds and research houses are investing in it, but they have whole research teams looking at everything, and are investing in a very minor way relative to their portfolios.”

ASIC said it recently moved to shut down a Gold Coast-based business, A One Multi, which allegedly promoted high investment returns and transferred more than $2.4m to buy crypto-assets.

“ASIC obtained interim orders and injunctions from the Federal Court in Queensland against A One Multi and its directors Aryn Hala and Heidi Walters to protect investors,” it said.

Originally published as Super funds are cryptocurrency scam targets, ASIC warns