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The Australian Securities and Investments Commission (ASIC) has announced that it has taken action to stop a number of proposed initial coin offerings (ICOs) targeting retail investors.
Last year, ASIC published an information sheet, which provided guidance for entities considering an ICO.
In April 2018, ASIC received delegated powers from the Australian Competition and Consumer Commission (ACCC) to take action under the Australian Consumer Law relating to crypto-assets. It enables 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.
Since April, the regulator has successfully stopped five ICOs that sought to raise capital without the appropriate investor protections, ASIC said in a press release dated September 20. It said that these ICOs have been put on hold and some will be restructured to ensure compliance with the applicable legal requirements.
In addition, ASIC said that it is taking further action in respect of one completed ICO, without revealing further details.
“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,” ASIC Commissioner John Price said.
