The Australian Securities And Investments Commission Clamp Down On Rogue ICOs
The Australian Securities and Investments Commission (ASIC) have announced that since April 2018, they have stopped five Initial Coin Offerings (ICOs) from taking place, suggesting that ASIC are serious in preventing rogue ICOs from taking place within Australia, as a result of the threat they pose to many innocent cryptocurrency investors. Of course, the running of ICOs is not illegal in Australia, therefore this acts as a demonstration for ASIC actually running investigations into new ICOs. If they donât believe the project complies with the local laws and regulations, the ASIC will shut it down.
According to Coindesk, the Commissioner of ASIC, John Price has issued the following statement:
âIf 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. 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."
Out of the five that have so far been shut down, a number will be given the opportunity to restructure in order to ensure they comply with the local laws and regulations, and one will be investigated further, though the true nature of this additional investigation has not been made clear.
Okay, so five ICOs isnât a huge deal, but this does prove two things. First of all, ASIC are acting on their words and do seem to be working to ensure all ICOs are carried out in a legitimate manner, this should be of some comfort for investors within Australia. Next, this also confirms that the majority of ICOs in Australia probably are legitimate. With ASIC closing down so few since April, we can assume that the majority of startups and new crypto projects in Australia are operating legitimately and with good intentions.
What lies for the future of ICOs in Australia?
We know that the Australian authorities are cautious about ICOs and about cryptocurrency in general. We do expect that regulation will clamp down on ICOs and that one day, such offerings may become illegal. For now though, it seems that authorities in Australia are allowing a very healthy crypto and blockchain industry to develop. If this is the case, then perhaps the opposite will happen and Australia will soon become a hub for ICOs and crypto startups?