Australia’s corporate watchdog said on Tuesday it was cracking down on «misleading or deceptive conduct» in the marketing and selling of digital tokens through initial coin offerings (ICOs).
The Australian Securities and Investments Commission (ASIC) said some companies have already halted their offerings or indicated a change in their ICO structure as a result of its inquiries.
ICOs become popular with start-ups as a way to finance projects. But regulators in several countries including China and South Korea are trying to rein in the global boom in trading cryptocurrencies.
The ICO market is not large in Australia but ASIC says poor conduct will have a negative impact on investor confidence over time. ASIC Commissioner John Price said in a statement, that «if you are acting with someone else’s money, or selling something to someone, you have obligations».
«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», – he added.
Last week, John Price told a gathering in Sydney that ASIC will look to update its guidance on companies considering ICOs. It will also highlight that Australian corporate and consumer law might apply no matter where the ICO is created and offered.