Australian Financial Watchdog Releases Warning On Misleading ICOs

Australian financial watchdog, the Australian Securities and Investments Commission (ASIC), has issued a notice on “misleading” Initial Coin Offerings (ICOs) and crypto-asset funds focused at retail investors.

The document was published Thursday, September 20, on ASIC’s official site.

As indicated by the release, ASIC has halted five different ICOs from raising capital since April 2018. This was done because of the absence of suitable investor assurance measures on part of the fundraisers being referred to.
As the watchdog expresses, these contributions must be rebuilt to meet existing legitimate principles. In September, one ICO was requested to close down permanently because of security concerns, ASIC included.

The document also shows principle issues that are presently common on the ICO market, as recognized by ASIC. Among these are “misleading or deceptive statements in sales and marketing materials” and unregistered investment plots that don’t hold Australian financial service permit.

ASIC also encourages Australians to counsel with MoneySmart – a site kept running by the watchdog itself – to teach themselves on different financial issues previously putting resources into ICOs.

Clarifying the organization’s primary worries about ICOs, ASIC Commissioner John Price has stated:

“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.”

As Cointelegraph reported in September, ASIC has uncovered its plans approach cryptocurrency exchange and ICOs with the expanded examination, assigning the business as a high-need one for the agency until 2022.