While speaking at an Fintech event in Sydney on Thursday, April 27, John Price, the commissioner of Australia’s securities watchdog the Australian Securities and Investments Commission (ASIC) told the audience that the agency is keeping a watch on businesses trying to circumvent the country’s regulations and luring its investors by launching overseas ICOs.
During the event, Price said: “We will highlight that Australian corporate and consumer law might apply – even if an ICO is created and offered from overseas. This is an important point given the international nature of this sector.”
He also added saying “I cannot stress enough that if you are doing business here and selling something to Australians – including issuing securities or tokens to Australian consumers – our laws here can apply.”
In a further crackdown on misleading and deceptive ICOs in the market, ASIC today issued a statement that it is “issuing inquiries to ICO issuers and their advisers where we identify conduct or statements that may be misleading or deceptive.”
The securities watchdog also indicated that it will take every measure to stop any unlicensed activity taking space in the crypto space. The agency stated: “As a result of our inquiries, some issuers have halted their ICO or have indicated the ICO structure will be modified.” However, it refused to comment on the exact number of token sales being cancelled after this action.
The task was initially granted to ASIC by the Australian Competition and Consumer Commission (ACCC). Along with the ASIC Act, the agency will be using current laws under the Australian Consumer Law to eliminate all the misleading token sales.
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.”
The agency has made it clear the it will be scrutinizing every aspect of the token sale in the white paper like fundamental concerns, structure of the token offering, status of the offeror, etc. It will also check that there are no misleading or deceptive statements being made or marketing gimmicks involved in the whitepaper. If found guilty, the token sale issuer will be penalised under the Australian law.
ASIC explained: “In one recent example, ASIC took action to protect investors where we identified fundamental concerns with the structure of an ICO, the status of the offeror and the disclosure in its white paper. In addition to potentially misleading statements in the white paper, the offer was an unregulated managed investment scheme.”