Australia’s Regulatory Watchdog Updates Guidelines for Cryptocurrencies and Overseas ICOs

Australia’s financial regulatory body - Australian Securities and Investments (ASIC) has recently updated the guidelines pertaining to digital currencies and ICOs especially after a lot of perceptions brewing that ICOs that are registered overseas can bypass the regulatory oversight.

While speaking at an fintech event on Thursday this week, Commissioner of Australian Securities and Investments (ASIC) - John Price - updated his stand to the audience about overseas ICOs trying to lure Australian investors.

He 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 further added: "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.”

Commissioner Price made this clear during his speech that even though there is a freedom to accept the new revolutionary change in the financial sector with the arrival of blockchain and virtual digital currencies, it won’t be done at the cost of jeopardizing ‘basic consumer protection’.

Price said that The development of innovative technologies like blockchain and ICOs has the potential to revolutionize how our society engages with financial products and services, but with revolution comes risk… Scams are corrosive when it comes to building any form of trust, and we all have a role to play in making sure they don’t happen.”

Last year in September 2017, ASIC had released an information sheet while providing guidance to businesses about the fundraising process through ICOs. Based on the type of token being offered, the ICO would be classified as a derivate, a non-cash payment, a managed investment scheme or a share offering.

The sheet notes that depending on the way the ICO is structured, its legality would be determined that would serve as warning to businesses to not indulge in any malicious practices during the token sale. Keeping this as the key focus for further development of the fintech space in Australia, Price said that ASIC would consider updating some of its guidelines for digital currencies and ICOs.

He said: I wanted to flag to you all this evening that we will be making some updates to the information sheet in the coming weeks,” and will include more on cryptocurrencies”.

Pressing that the agency will take every step to mitigate any misleading conduct in the ICOs, Price concluded his speech saying “…if there is one main thing I need you all to take away from ASIC tonight, it is we are dealing with real people’s money and ASIC’s support cannot come at the expense of basic consumer protection and the necessity to prevent investors and their funds being unfairly parted.”