Consumers using digital assets will now be able to bring disputes to the Australian Financial Complaints Authority (AFCA) following the Australian Securities and Investments Commission’s (ASIC) clarification about when a digital asset is considered a financial product.
Late last year, ASIC issued updated guidance that outlined stablecoins, wrapped tokens, tokenised securities and digital asset wallets were among the digital asset products it considered to be financial products.
AFCA noted businesses providing services involving financial products, which digital assets are now considered to be, generally need to hold an Australian financial services licence and be a member of the complaints body.
Prior to the updated guidance on digital assets, AFCA membership was not mandatory for digital providers, although some chose to join voluntarily.
As with disputes involving other forms of financial product, if consumers holding digital assets are unable to resolve them directly with their provider, their next step is to approach AFCA.
“This requirement gives consumers a clear pathway to complain if they are using these products and something goes wrong,” AFCA investments and advice lead ombudsman Shail Singh said.
“Digital assets are increasingly part of the way people manage and move money, so it’s important consumers have access to an independent dispute resolution service if they need it.”
Over the past six years, AFCA has handled more than 1000 complaints concerning digital assets and Singh indicated the organisation has relevant experience dealing with the types of issues that can arise in this sector.
More than 65 organisations providing digital asset services are currently AFCA members.
AFCA reminded consumers where an agreement cannot be reached between disputing parties, the authority can issue decisions that are binding on firms.
The government agency’s role will also be expanding to provide external dispute resolution for eligible scam complaints from March next year.
