Australian regulator ASIC updates guidance on crypto-assets and ICOs

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The Australian Securities and Investments Commission (ASIC) has published new information to help businesses engaged with initial coin offerings (ICOs) and crypto-assets ensure that they are carrying out their operations in a compliant manner.

In a press release dated April 30, the regulator said that it has updated its Information Sheet 225 (INFO 225) Initial coin offerings and crypto-assets, which was first published in September 2017 and had gone through its first update last May.

ASIC said that its recent experiences in this area suggest that “ICOs and crypto-assets will often be financial products or involve financial products that are regulated under the Corporations Act.”

INFO 225, which covers crypto-assets such as cryptocurrency, tokens or stable coins, seeks offer clarity as to how the Corporations Act would apply to businesses that are considering raising funds through an ICO and to businesses involved with crypto-assets.

ASIC Commissioner John Price said that businesses involved with ICOs and crypto-assets need to undertake appropriate inquiries to ensure their compliance with all relevant Australian laws.

“As a minimum, regardless of whether a financial product is involved in the fundraising, the prohibitions against misleading or deceptive conduct under Australian Consumer Law apply,” he said.

“Australian laws will also apply even if the ICO or crypto-asset is promoted or sold to Australians from offshore. Issuers of ICOs, crypto-assets and their advisers should not assume the use of these structures means that key consumer protections under Australian laws do not apply or can be ignored.”

Last September, the regulator had revealed its intention to develop a new approach for regulating cryptocurrency exchanges and increase monitoring of ICOs in order to protect investors.

In April 2018, the Australian Transaction Reports and Analysis Centre (AUSTRAC) rolled out new Anti-Money Laundering and Counter Terrorism Financing (AML/CTF) laws for digital currency exchange providers operating in the country.