The Australian Securities and Investments Commission (ASIC) on Thursday released guidance on the legal responsibilities of Australian investors when it comes to participating in initial coin offerings (ICOs), just weeks after China's government banned the practice.

An ICO is a form of crowdfunding that internet businesses use to raise capital. In exchange for cash, Bitcoin or Ethereum, the organisations offer digital tokens or coins that allow the investor to participate in a new, developing network.

More than $US2.2 billion has been raised via ICOs in 2017, according to CoinSchedule.

In Australia, the legal status of an ICO is dependent on its circumstances, and ASIC has said an ICO could be a managed investment scheme, an offer of shares, an offer of a derivative, or a non-cash payment facility.