ASIC ups the ante on ICOs
ASIC recently announced that in the past few months it has taken action to halt Initial Coin Offerings, stating that recurring issues are posing significant risks for investors. These issues include:
ASIC Commissioner John Price stated:
“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 revealed that since April 2018, other ICOs have been placed on hold and some will require restructuring to ensure legal compliance. ASIC has also halted a crypto-asset managed investment scheme and is continuing to take action, with the company behind Michael Clarke-backed cryptocurrency startup, Global Tech Exchange, recently folding after ASIC halted its fundraising ICO.
We have previously discussed ASIC’s guidance to ICOs in Australia. If you are looking to undertake an ICO, you need to be aware of your legal obligations, many of which are highlighted in ASIC’s Information Sheet 225.
If you need further information or assistance in this area, please contact HopgoodGanim Lawyers’ Digital Assets team.