Clicky

ASIC looks to stop several retail crypto offerings

The Australian Securities and Investments Commission (ASIC) has taken action to stop several proposed initial coin offerings (ICOs) or “token-generation events” which take aim at retail investors.

The securities regulator also said it recently stopped the issue of a product disclosure statement (PDS) for a crypto-asset managed investment scheme.

ASIC said it has identified consistent problems within such offers, including the use of misleading or deceptive statements in sales and marketing materials, the operation of illegal unregistered managed investment schemes, and a lack of Australian financial services licences.

Related News:

Such problematic offers involve significant risks for investors, the regulator said.

“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,” ASIC Commissioner John Price said.

“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.”

In five other separate matters since April 2018, ASIC said it successfully acted to prevent ICOs raising capital without the appropriate investor protections. These ICOs have been put on hold and some will be restructured to comply with the applicable legal requirements, it said.

ASIC said it is taking further action in respect of one completed ICO.

On 13 September 2018, ASIC said it issued a final stop order on a PDS issued by Investors Exchange Limited (IEL) for units in its New Dawn Fund. The fund was proposing to invest in a range of cryptocurrency assets.

Following ASIC raising concerns about the PDS, IEL consented to a final stop order so that no units could be obtained under the PDS.

ASIC acknowledged the co-operative approach taken by IEL in responding to its concerns.




Related Content

Poor breach reporting a lead indicator for ASIC embedding

Financial institutions which have proved tardy with breach reporting are more likely than others to find themselves accommodating embedded senior Aust...Read more

Planners should be answerable on products, says ISA

Personal financial advice provided by financial planners should not be exempt from the Government’s new financial product design and distribution ob...Read more

FPA suggests risk rating financial products

The Financial Planning Association (FPA) has suggested that the Government should consider applying a risk rating to financial products, utilising gui...Read more

Author

Comments

Add new comment