ASIC warns against self-managed super funds and crypto investments

  • ASIC has noticed an increase in marketing recommending Australians switch from retail and industry superannuation funds to self-managed superannuation funds (SMSFs) so they can invest in a ‘high return’ portfolio
  • SMSF trustees are being targeted to invest in crypto-assets (or cryptocurrencies)
  • Superannuation is an attractive target for scammers
  • Crypto-assets are a high risk and speculative investment
  • ASIC is reminding superannuation fund members it is best practice to seek advice from a licensed financial adviser before agreeing to transfer superannuation out of a regulated fund into an SMSF
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Consider the risks before setting up an SMSF

Setting up an SMSF is one of the most significant decisions you can make relating to your retirement savings. Before making the decision to set up an SMSF, seek advice from a licensed financial adviser. Do not rely on social media ads or online contact from someone promoting an ‘investment opportunity’. 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.

Investing into crypto-assets

Australians who decide to self-manage their super should consider the risks before using their SMSF to invest in crypto-assets. As the trustee of your SMSF, you ultimately bear responsibility for the fund’s decisions and for complying with the law even if you rely on other people’s advice – licensed or otherwise. ASIC recently issued warnings about an increase in scams involving crypto-assets, and our Moneysmart website contains information on how to spot an investment scamSMSFs and crypto-assets (or cryptocurrencies). The ATO website also contains information on superannuation scams.

If you decide to set up an SMSF, you should seek professional advice to determine what investments to make. There are rules governing investments the SMSF can make and taxation consequences for investments, including cryptocurrencies. Any investment must be permitted under the fund’s trust deed and be in accordance with the fund’s investment strategy. 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. The ATO website contains information about these obligations. A licensed financial adviser can assist you with formulating an appropriate investment strategy.

Product issuers and market operators should also note ASIC’s latest publications on meeting regulatory obligations relating to crypto-asset exchange-traded products (ETPs) and other investment products.

ASIC action

In November 2021, ASIC moved to shut down unlicensed financial services business A One Multi Services Pty Ltd, located in Queensland. The Gold Coast–based company appears to be engaging in unlawful activity, with ASIC alleging more than $2.4 million was transferred from A One Multi 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. Mr Hala appears to represent to investors that he can help them invest their superannuation in an SMSF, and then loan the money in their SMSF to A One Multi. ASIC alleges Mr Hala told investors that they would receive annual investment returns of over 20%.

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