ASIC Sends Clear Message After Shutting Down Multiple ICO’s

The Australian Securities and Investments Commission (ASIC) has decided to take a closer look into some of the country's initial coin offerings (ICOs) and crypto trading funds. It has already confirmed that it has identified several problem ICOs and has had them shut down.

A number of companies launched ICO’s in 2016 and 2017 as a way to raise quick funds. While many were genuine, there were also a number of bad apples that took advantage of investors by manipulating facts and misrepresenting themselves.

ICOs are currently not banned in Australia and are continue to operate with very little regulations. It seems that this situation is about to change as AIC has identified several problems with a number of ICO operations that put their investors at risk. This includes releasing deceptive promotional materials and operating an investment scheme in Australia without a license.

In a statement, John Price, the ASIC commissioner said

If 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.

ASIC has already blocked five ICOs since April 2018 from operating in Australia. The main reason was the lack of protective measures for their investors. These five ICOs are on hold until they have restructured themselves to meet the requirements set forth by the ASIC.

Crypto Funds Also Being Targeted

The ASIC is not limiting itself to companies who are planning to launch ICOs. The watchdog is also going after companies who have already completed their ICOs. The New Dawn Fund which was operated by Investors Exchange Limited recently received a stop order on its Product Disclosure Statement which was brought on by increased scrutiny by the ASIC.

ICOs and crypto funds have been in the crosshairs of the ASIC for some time now. The commission has targeted multiple ICOs in the past and forced a number to stop their proposed launch when it identified a number of concerning features. The ASIC tried to make things easier for ICO launches after it released guidelines on ICO fundraising in 2017 which was aimed to remind potential ICO issuers of their obligations to the law. The ASIC is happy to see ICO launches take place down under as long as regulations are complied with.