Australia Targets Deceptive Initial Coin Offerings

The Australian Securities and Investments Commission (ASIC) has announced that it will start focusing on inquiring and halting deceptive ICOs. ASIC is closely observing the documents and statements of crypto projects to single out fraudulent schemes. ICOs with incomplete information or misleading structure will get warnings to update their models. ASIC has already sent notices to such projects, where the ICO has either been closed or modified.

On 19 April 2018, ASIC received delegated powers from the Australian Competition and Consumer Commission (ACCC) to take action under the Australian Consumer Law relating to crypto-assets. The delegation from the ACCC enables ASIC to take action against misleading or deceptive conduct in marketing or selling of ICOs, even if the ICO does not involve a financial product.

ASIC’s MoneySmart website defines ICOs and explains the risks involved in taking part in these schemes. It also warns users that ICOs are high risk investments and are mostly neither registered nor regulated.

John Price, ASIC Commissioner, said that if you are selling something or using someone’s money for a project, you have a few responsibilities. “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,” said Price.

Last month, the Australian government introduced new laws for cryptocurrency exchanges to combat money laundering and terrorism financing. Exchanges are now required to register with Australian Transaction Reports and Analysis Centre (AUSTRAC) before May 14th 2018. Under these regulations, customer’s identities and transaction activities must always be tracked. In case, someone sells, buys or withdraws more than $10,000, or behaves suspiciously, exchanges must inform AUSTRAC immediately. “The information that these businesses will collect and report to AUSTRAC will have immediate benefit in the fight against serious crime and terrorism financing,” said AUSTRAC CEO, Nicole Rose.

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