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Australian Securities and Investment Commission Cracks the Whip on Deceptive ICOs

AUS SEC

The Australian Securities and Investment Commission (ASIC) made it known on Thursday that it would be heightening the measures it employs in order to crack down on ICOs that it deemed to be ‘misleading’ in nature. The ASIC raised issues with the ICOs employing the use of statements that were deceptive in the messaging they disseminated for their sales and marketing while possessing Australian financial service licenses.

John Price, the ASIC Commissioner states, “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”.

According to Jonathan Miller who is the managing director of Bit Trade, the ASIC acting in the interest of investors does not come as a surprise to him and that he welcomed acting in coordination with the ASIC to make sure that Australian corporation and investors can make the most of the technology. Miller, however, also felt that Australia had missed the mark in forming a regulatory framework that would be applicable to ICOs but also felt that there was still time for progressive change to be enacted.

Miller stated, “Other jurisdictions are already ahead of the game with this, with Malta partnering with Binance to create a regulated security token exchange. ASIC is the next logical step for Bit Trade and we look forward to sharing insights with them on how this technology can create efficiencies and more upside for both companies and investors”.

ASIC has halted five ICOs from proceeding with the process of raising capital as they have not acquired the necessary investor protection that needed to be in place. The ICOs in question have been held but till the time that they are able to restructure themselves in order to fall in line with the required legal responsibilities.

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