The Australian Securities and Investments Commision (ASIC) is taking steps to bust the misleading and decisive marketing techniques used by many initial coin offerings (ICOs) to protect the interests of Australian investors.
The task was delegated to the ASIC by the Australian Competition and Consumer Commission (ACCC) on April 19. The agency will use the current laws under the Australian Consumer Law along with the ASIC Act to put the misleading token offerings on the stand.
The ACCC equips the agency to take action against misleading or deceptive conduct in marketing or selling of ICOs, even if the ICO does not involve a financial product.
John Price, Commissioner of the ASIC, commented: “If you are acting with someone else’s money, or selling something to someone, you have obligations. Regardless of the structure of the ICO, there is one law that will always apply: you cannot make misleading or deceptive statements about the product. This is going to be a key focus for us as this sector develops.”
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Already in action
The ASIC is analyzing every ICO offered to Australian citizens by identifying fundamental concerns related to the structure of the token offering, the status of the offeror, and the disclosure in its white paper. It is also looking for any misleading statement made by the ICO issuer on its whitepaper. If the token offering violates any rules, it might be liable for penalties under the Australian laws.
The agency has already started to send inquiries to ICO issuers and their advisers of many ICOs, which is believed to have conducted or issued statements that may be misleading or deceptive.
Australian crypto market
Though the market for cryptocurrencies is relatively small in Australia, its government and regulatory agencies are taking liberal steps to regulate the sector. Last month, the Australian Transaction Reports and Analysis Centre (AUSTRAC) has imposed new rules on the cryptocurrency exchanges in Australia and also made it mandatory for the exchanges to acquire a license from the agency.
Moreover, due to the government’s tolerant approach to the controversial sector, many Australian blockchain firms have raised millions via token sale since late 2017.