The market watchdog has urged Australians to understand investing in crypto assets is a form of extreme risk-taking.
"We want to be very clear and unambiguous in our messages to consumers entering the market," ASIC commissioner Sean Hughes told a Governance Institute conference on Monday.
"We think that crypto assets are highly volatile, inherently risky and complex."
The Australian Taxation Office estimates more than one million taxpayers have dabbled in crypto assets since 2018.
Mr Hughes said the Australian Securities and Investments Commission collaborates with agencies here and overseas and will take enforcement action to disrupt and deter harmful products.
ASIC research on investor behaviour found almost half (44 per cent) of the 1000 active investors surveyed held crypto assets.
Of those, only 20 per cent considered their behaviour risk-taking, Mr Hughes told the conference.
He said the findings were similar to other countries, where an international study found "extreme levels of risk taking by unfamiliar or unsophisticated investors" on crypto assets.
As the digital and broader economies merge, lawmakers know regulations are failing to keep pace with the crypto asset sector.
Mr Hughes welcomed the Albanese government's focus on consumer protection and its plan to map the gaps to see which currencies and tokens existing laws cover.
Treasury last month announced plans for token mapping to identify how crypto assets and related services should be regulated.
A licensing framework, obligations for third party custodians of crypto assets and additional consumer safeguards will follow.