The regulation of Initial coin offerings is an issue worldwide, as for each country it differs. Some countries ban ICO, while the majority of countries haven't acted yet. Australia is the latest country to issue their own Australia ASIC ICO guidelines as of late. What is the stance of Australia on ICO?
More so, Australian consumer law will categorize the token sales and ICO structured companies will not have the rights to offer financial products.
Australia ASIC ICO guidelines unveiled
Part of the ASIC statement reads:
"In some cases, ICO issuers may frame the entitlements received by contributors as a receipt of a purchased service. However, if the value of the acquired digital coins is affected by the funds from contributors or use of those funds under the arrangement, then the ICO is likely to fall within the requirements relating to MIS managed investment schemes. This is often the case if what is offered through the ICO has the attributes of an investment.”
ASIC issuance of law will carry some protections for investors if an ICO meets the defined requirements. More specifically, general consumer law regulates token sales in Australia. That in itself is a rather interesting decision, to say the least. There is one requirement, though, as companies may not offer financial products. It will be hard to classify which projects do or don’t in this regard. Moreover, there are other regulations and guidelines the ICOs need to follow depending on its structure.
ASIC warnings to ICO white papers
The commissioner of ASIC, John Price says "if the tokens are not financial products, investors will need to closely consider the ICO documentation as the investor protection regime under the Corporations Act will not apply."
Furthermore, for ICO financial products, the operator may also require a market license in order to sell tokens. The ASIC also gives a warning to the ICO white papers not to issue misleading statements to the consumers. Approximately ICOs raises $797 million the second quarter of this year, according to the reports. On a different note, Australia has recently moved towards legalizing Bitcoin as well as ending double taxation to cryptocurrencies.
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