ASIC takes aim at “initial coin offerings”
The Australian Securities and Investments Commission (ASIC) has put sellers or marketers of digital or virtual tokens via initial coin offerings (ICOs) in its crosshairs.
“These offers can involve significant risks for investors that are often not disclosed or well understood,” the regulator said.
ASIC said it would focus on misleading or deceptive conduct by those offering such products, which is prohibited under the Australian Consumer Law and the ASIC Act.
In April, ASIC received powers from the Australian Competition and Consumer Commission (ACCC) to take action under the Australian Consumer Law relating to crypto-assets.
The powers enable ASIC to take action against misleading or deceptive conduct in marketing or selling of ICOs, even if the ICO does not involve a financial product.
“If you are acting with someone else’s money, or selling something to someone, you have obligations. Regardless of the structure of the ICO, there is one law that will always apply: you cannot make misleading or deceptive statements about the product,” ASIC commissioner John Price said.
“This is going to be a key focus for us as this sector develops.”
Following recent inquiries into ICO issuers where it identified conduct or statements that may be misleading or deceptive, ASIC said that some issuers halted their ICO or indicated the ICO structure would be modified.
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