The Australian Securities and Investments Commission (ASIC) will update their guidelines to better reflect the evolving cryptocurrency industry, John Price, one of their commissioners, revealed in his speech at a fintech conference in Sydney on April 26. Price further cautioned any company planning to conduct an ICO against thinking of it as a way to avoid government regulation, while also expressing the commission’s commitment to fostering innovation in the fintech sector without sacrificing consumer protections.
Prohibition Of Deceptive Conduct
Having released Information Sheet 225 last year, the commission felt the need to update it to better reflect the current market and to include more details on cryptocurrencies. The commission is very keen to clamp down on deceptive marketing tactics that have become worryingly popular.
Regardless of the structure, however, there is one law that will always apply – you can’t make misleading or deceptive statements about the product. This is going to be a key focus for us going forward.
The update will include questions that the commission feels are necessary to be asked by all investors which will encourage sound business decision making, Price said. It will also highlight the applicability of Australian corporate and consumer law, even in cases where an ICO has been created and offered from overseas. The update will also detail how the Australian financial laws that prohibit misleading and deceptive conduct will apply in the cryptocurrency industry, Price added, insisting that this will be an area on which the commission will place great emphasis.
The commission is working with other regulators, both domestically and internationally, to gain clarity on how to better regulate the cryptocurrency industry. Some of the key areas the partnerships are focusing on are anti-money laundering and taxation. It’s also engaging with other stakeholders in the ICO sector to better address their interests, with Price revealing that the commission has met and engaged with more than 200 enterprises or individuals involved in the sector over the past year.
Blockchain And ICOs Revolutionizing Financial Services
The development of innovative technologies like blockchain and ICOs has the potential to revolutionise how our society engages with financial products and services, but with revolution comes risk.
He outlined some of the most pressing concerns that will need to be addressed in order for the industry to grow, with the growing perception of ICOs as a quick and unregulated way to make some quick money being at the top of the list. This attitude continues to have a negative impact on the long-term success of the industry. Another concern was the misguided notion that Australian regulations can be bypassed if the entire process is carried out overseas. Price had a stern warning for those who are of that mindset.
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.
He ended his speech by advising everyone present to acquaint themselves with the updated guidelines and to get in touch with the commission to discuss their business models as early during the process as they can so that it can offer any assistance required.