This article was published on September 21, 2018

Australian financial watchdog puts 5 ICOs ‘on hold’ for violating regulations

Some need to restructure before launching


Australian financial watchdog puts 5 ICOs ‘on hold’ for violating regulations

The Australian Securities and Investment Commission (ASIC) has flexed on cryptocurrency fraudsters. It has just released details of disciplinary action taken against misleading initial coin offerings (ICOs) operating in Australia.

ASIC revealed it has put five different ICOs “on hold” until they comply with the new rules. Among other things, ASIC insists some of the startups in question would have to undergo “restructuring” in order to comply with regulatory requirements.

The five ICOs were restricted from raising the capital of Australian investors without appropriate protections.

“ASIC has taken action to stop several proposed initial coin offerings or token-generation events (together, ICOs), targeting retail investors,” a media release reads. “As well, ASIC recently stopped the issue of a Product Disclosure Statement for a crypto-asset managed investment scheme.”

The <3 of EU tech

The latest rumblings from the EU tech scene, a story from our wise ol' founder Boris, and some questionable AI art. It's free, every week, in your inbox. Sign up now!

The statement also confirms that ASIC has taken action against at least one completed ICO.

ASIC is Australia’s equivalent of the US Securities Exchange Commission (SEC). As an independent government body, it regulates and maintains compliance for the greater Australian investment sector.

ASIC flagged cryptocurrency operations as fraudulent for “misleading or deceptive statements in sales and marketing materials,” “operating an illegal, unregistered, managed investment scheme,” and “not holding an Australian financial services license.”

“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,” warned ASIC Commissioner John Price. “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.”

Australia isn’t the only nation seeking to protect its citizens from cryptocurrency dangers. France recently enacted legislative framework requiring ICOs to provide safeguards and guarantees to investors.

An international collective taskforce, known as NASAA, also announced the investigation of over 200 cases of potentially fraudulent ICOs and cryptocurrency businesses since May.

If you’re interested in everything blockchain, chances are you’ll love Hard Fork Decentralized. Our blockchain and cryptocurrency event is coming up soon – join us to hear from experts about the industry’s future. Check it out!

Get the TNW newsletter

Get the most important tech news in your inbox each week.

Published
Back to top