Topic: Australia’s Financial Watchdog Cracks Down on ‘Misleading’ ICOs & Crypto Funds (Read 93 times)

Australia’s Financial Watchdog Cracks Down on ‘Misleading’ ICOs & Crypto Funds
Australia’s financial regulator and watchdog is ramping up its scrutiny into ‘misleading or deceptive’ initial coin offerings (ICOs) and crypto-asset funds targeting retail investors.

The Australian Securities and Investments Commission (ASIC) has confirmed it has identified “consistent problems” to ultimately shut down several initial coin offerings aimed at soliciting funds from retail investors.

A radical new form of digital fundraising powered by cryptocurrencies like bitcoin and ethereum, ICOs are a source of capital for startups and companies who offer custom cryptographic tokens with an inherent benefit in exchange to investors. ICOs aren’t banned in Australia and while there is no ambiguity about their legal status, they are largely unregulated.

The “use of misleading or deceptive statements in sales and marketing materials”, running an “illegal registered managed investment scheme” without possession of an Australian financial services licenses were, in particular, highlighted by the ASIC as consistent problems found among the targeted ICOs, leading to “significant risks” for investors.

The regulator’s commissioner John Price said:

“If you raise money from the public, you have important legal obligations. It is the legal substance of your offer – not what it is called – that matters. You should not simply assume that using an ICO structure allows you to ignore key protections there for the investing public and you should always ensure disclosure about your offer is complete and accurate.”
https://www.ccn.com/australias-financial-watchdog-cracks-down-on-misleading-icos-crypto-funds/