The Australian regulator tightens control over the fulfillment of obligations for ICO


#1

The financial regulator of Australia tightens control over the “misleading and fraudulent” primary placements of tokens (ICO), as well as the crypto-currency assets offered to retail investors.

The Australian Securities and Investments Commission (ASIC) confirmed that it had discovered “relevant problems” that eventually allowed the closure of several primary token offering projects aimed at attracting funds from retail investors. ICO is not banned in Australia, and although there is no ambiguity regarding their legal status, they are largely unregulated.

“The use of misleading or fraudulent applications in sales and marketing materials” using an “illegal registered managed investment scheme” without possession of licenses for financial services in Australia, ASIC identified among the problems that it found in several ICOs that lead to “significant risks” for investors . Commissioner regulator John Price (John Price) said:

"If you collect money from the public, you have important legal obligations. The legal component of your proposal is important, and not what it’s called. You should not simply assume that using the ICO structure allows you to ignore key investor protection measures, and you should always ensure that the disclosure of your proposal is complete and accurate. "

In addition, the regulator also said that it banned five ICO projects from April 2018 due to the lack of investor protection measures. ASIC noted that all five ICOs are suspended, and some of them are restructured in accordance with approved requirements.

The ICO operators who completed the sale of the tokens also faced tougher control by ASIC. The New Dawn Fund has received the final order to terminate its activities due to its Disclosure Statement, published by Investors Exchange Limited (IEL).

Earlier, the regulator defined “fundamental problems” in the structure, status of the issuer and ICO documents, in the past prohibiting the collection of funds even before its launch.

Almost a year ago, ASIC published a guide to ICO to remind operators of their obligations before releasing the token. Then the regulator stated:

“ASIC recognizes that the ICO has the potential to make an important contribution to the methods available to businesses to raise funds and investment opportunities available to investors.”

In April, the commissioner of ASIC Price confirmed that the ICO industry would become a “key area” for the regulator to continue working. He stressed that the regulator will remain “open” to new financial innovations, but not at the expense of “the basic policy of consumer protection.”


#2

it should be like that. there is a special regulator on the ICO project. investors will be comfortable with investment and crypto communities increasingly motivated.


#3

Good thing they have not banned ICOs yet with recent happenings in their territory. It is also commendable that they show care for their community. Really, there should always have investor or consumer protection laid out, in case of fraudulent activities and non compliance with what is stated or promised by the project team. These investors should not be left behind and unattended s they are the means for which a project will continue and survive. With the published guidelines, they should have been complying, else they should not hold any of these activities and jeopardize the investors. Well, there have been numerous instances wherein the project team evaporates and nowhere to be found. Hopefully, they will continue to do this and be more stricter to regulate these unusual acts which aim to defraud innocent investors.


#4

this action of the australian government is very good government of australia need not their citizens to be made fool and mislead by the fraudulent so tightening the rule for safety


#5

One of the best things I have read regarding rules and regulations for crypto.

That was exactly my first thought too. They are finding the solution of the problem instead of removing the problem which some countries are doing. A good step indeed.


#6

They might have seen the good things about blockchain technology. And maybe they do not want to get left behind. They know blockchain’s positive and will be added value will be much greater than the risks involve plus they know there will be ways you can mitigate them instead of wiping and getting rid of the whole technology itself.