ASIC has revised guidance on crypto assets and initial coin offerings (ICOs). The latest updates will help operations involved with crypto-assets and ICOs to assess their legal obligations. The watchdog stated that these regulatory obligations are in place to keep the integrity of Australia’s financial industry and ensure customer protection.
ASIC has restructured Information Sheet 225 (INFO 225) based on its recent experiences with crypto-assets and ICOs, which indicate that crypto-assets and ICOs will often be financial offerings or comprise financial products that are structured under the Corporations Act. The sheet gives information on the way the Corporations Act may apply to operations that are contemplating raising capital through an ICO and to operations involved with crypto-assets.
The ASIC’s latest governing guidelines for cryptocurrencies set an avenue for nonfinancial ICOs to exist. Such a model differs significantly from jurisdiction as that the U.S., where its SEC has consistently stated that ICOs are always possibly to be securities.
Fast-forward to 2019’s revision and the ASIC appears to be establishing the base for an improved comprehensive regulatory environment. As per the latest revision, investment advisors and token issuers dealing in tokens thought financial products need an Australian Financial Services license. For cryptocurrency exchange markets that list tokens that are considered to be financial offerings, an Australian market authorization is compulsory. Such platforms may even need a clearing and settlement facility license.
The ASIC rules encourage token issuers to precisely decide whether their initial coin offering is a financial product. As it is known, the definition of a financial offering in Australia extended to all products that have a financial offering. So, initial coin offerings that offer derivatives, NCPs, management investment schemes, and securities are considered financial products.
The ASIC updates published on May 30, 2019, are the second revision to Information Sheet 225, which was originally launched in September 2017. The initial update to the sheet was in April 2018. At the time of posting its first ICO updates, the ASIC stated that it want token issuers to be cautious of the potential applications of the nation’s Corporations Act of 2001 to initial coin offerings.