The Australian watchdog ASIC releases ICO licensing guidelines on Thursday to clarify their classification and legality. What are the guidelines?
May 30, 2019, | AtoZ Markets - The financial regulator of Australia, the Australian Securities and Investment Commission (ASIC) released a new Initial Coin Offering (ICO) and cryptocurrency guidelines on its official website on May 30.
The agency detailed the prerequisites that a cryptocurrency business needs to follow in order to comply with both the Australian Corporations and ASIC Acts, but did not cover regulations enforced by other national institutions.
What are the crypto assets guidelines?
Notably, the guideline specifies that if a crypto asset is a financial product, then the issuer and firms dealing with it are required to hold an Australian financial services license. The report also notes that miners will be considered part of the clearing and settlement process in at least some instances:
“Where miners and transaction processors are part of the clearing and settlement (CS) process for tokens that are financial products Australian laws apply.”
The regulator also noted that “entities and their advisers need to consider all the rights and features of the ICO (regardless of how it is named and marketed) in determining whether the crypto asset is a financial product or involves a financial product.” The report further specifies that exchanges managing such assets will need to hold a license as well since the guidelines notes:
“Businesses offering crypto-assets, or offering services in relation to crypto assets, need to undertake appropriate inquiries to satisfy themselves they are complying with all relevant Australian laws.”
Lastly, the regulator also detailed entities on what they need to follow while issuing an ICO and warned against any deceptive tactics followed by the promoters.
It also urged the issuers to ensure that the KYC (Know Your Client) and Anti-Money Laundering laws apply to crypto assets, as does the Australian Consumer Law, including cases when the assets are issued or managed from abroad. This because crypto scams in the country have been mounting at a rapid pace.
“Australian laws will also apply even if the ICO or crypto-asset is promoted or sold to Australians from offshore. Issuers of ICOs, crypto-assets and their advisers should not assume the use of these structures means that key consumer protections under Australian laws do not apply or can be ignored.”
Overall, the introduction of these new guidelines is nothing to worry about for the Australian crypto trading community. As long as they stick to a licensed company then scam avoidance is pretty much guaranteed.