The Australian Securities and Investments Commission (ASIC) has released updated regulatory guidance for ICOs and crypto-related businesses.
“These regulatory requirements are in place to maintain the integrity of Australia’s financial market and ensure consumer protection,” the regulator stated.
According to ASIC, in many cases, ICOs and crypto assets are financial products or include financial products that are regulated under the Corporations Act. Thus, if a company is releasing a token that falls under the description of a financial product, laws will apply, along with the need to secure an Australian financial services (AFS) license.
Laws also apply to those that are offering advice, dealing, or providing other intermediary services for crypto-based financial products.
On the other hand, cryptocurrency wallet and custody service providers need to guarantee that they have the necessary custodial and depository authorizations. Cryptocurrency miners, if helping the settlement and clearing of tokens that are considered financial products, need to also comply with Australian laws.
Cryptocurrency exchanges and trading platforms are also bound to pertinent rules, like securing an Australian market license, while cryptocurrency payment and merchant service providers need to have an AFS license if they are offering “non-cash payment facility,” in addition to complying with several laws.
ASIC commissioner John Price said:
“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.”
According to ASIC, ICOs and crypto assets that do not fall under financial products must guarantee that they do not engage in deceptive or misleading statements or conduct.
ASIC initially released regulatory guidance for ICOs in 2017. The rules were primarily centered on Australian consumer law and the nation’s Corporations Act.