The Australian Securities and Investments Commission (ASIC) is planning to introduce new regulations for Initial Coin Offerings (ICOs) over the next few weeks.
ASIC Commissioner John Price revealed the plans on Thursday during a Fintech event that was held in Sydney. He announced that the watchdog would release updates this week that will particularly be aimed at foreign ICO fundraising projects that target Australian investors. In his statement, Prince pointed out that the regulatory authority will focus on applying the country’s corporate and consumer law. He also added that it is an important point of focus because it involves the public sector.
The statement highlights recent worries about the idea that ICOs can take advantage of various loopholes such as overseas legislation as one of the tricks of bypassing regulatory oversight. ASIC has been determined to protect Australian investors. The regulator revealed its first official initial coin offerings guidance in September 2017. Its aim was to make it clear under which circumstances that digital tokens should be considered as financial products thus falling under the regulatory jurisdiction of Australia’s Corporate Act 2001.
Prince pointed this out in one of the statements he made in his speech: “We are determined – as are you – to see Australia’s innovative fintech and regtech flourish in the right regulatory environment, and that means maintaining an open mind when it comes to new technologies and ‘early-days’ business models. But – and this is an important ‘but’ – ASIC must be focused on both protecting Australian consumers and facilitating innovation across the financial services industry.”
The ASIC Commissioner also noted that the regulatory watchdog has a similar approach for cryptocurrencies and ICOs especially because they can lead to a more mature industry that can be sustained over the long-term.
Current regulatory guidelines determine the legality of an ICO based on circumstances on which the ICO is held. However, they do not take into account the structure of the ICO. Australian law tries to keep ICOs legal and fair by preventing deceptive or misleading conduct. ASIC said that any promotional content involving ICOs should not be structured in a manner that would mislead any potential investors.
Prince added that it was in the interest of the cryptocurrency community to create a more mature and confident sector. The Australian regulator is currently working on creating a payment, taxation, anti-money laundering and financial services system in collaboration with other local and international regulators.