The Australian Securities and Investments Commission (ASIC) is acting to clamp down on misleading offerings and claims by dealers of internet-based currencies and crypto-assets aimed at attracting retail investors.
ASIC Commissioner John Price said the Commission had taken action to stop several proposed initial coin offerings or token-generation events, which together are referred to as ‘ICOs’.
‘If you raise money from the public, you have important legal obligations,” Mr Price said.
“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.”
He said ASIC had recently stopped the issue of a Product Disclosure Statement for a crypto-asset managed investment scheme.
Among the problems ASIC identified were the use of misleading or deceptive statements in sales and marketing materials; operating an illegal unregistered managed investment scheme; and not holding an Australian financial services licence.
Mr Price said that in five other separate matters since April, ASIC had successfully prevented ICOs raising capital without the appropriate investor protections.
“These ICOs have been put on hold and some will be restructured to comply with the applicable legal requirements,” Mr Price said.
“ASIC is taking further action in respect of one completed ICO.”
He said ICOs were highly speculative investments that were mostly unregulated, and while there were genuine businesses using the structure, many had turned out to be scams.
