Ms Armour said "many consider it may be the start of a new bull market for crypto-assets". Serious issuers of digital tokens had to distinguish their offers from scams, she said.

"As is common when there is a novel technology or idea that captures people’s imagination, we also continue to encounter many scams involving imaginary crypto-assets."

Insider trading review due

ASIC is also preparing to publish, as early next week, a review of "market cleanliness" in the listed equity market, which examines information leaks and insider trading.

Overall cleanliness was stable, with 0.6 per cent of accounts trading before a material Australian Securities Exchange announcement being deemed suspicious. However, the volume of stock traded by the suspicious accounts was higher.

Ms Armour said announcements by smaller ASX companies "are more likely to be unclean" and "many of these smaller companies are in the materials sector".

She warned corporate advisers and dealmakers to ensure policies were put in place to stop price-sensitive information leaking.

"A key takeaway from this study is that those involved in potential [mergers and acquisitions] activity should put in place robust information security measures as early as possible in the transaction cycle," she said.


Crypto comeback

Initial coin offerings are a niche form of private fundraising for the technologically sophisticated developer community. They allow a business to pre-sell rights to a particular product or participation in a service.

The raisings are typically conducted over blockchain technology and involve the issuance of a digital "token" paid for in a cryptocurrency such as bitcoin.

About $US7.5 billion ($10.76 billion) was raised around the world last year via ICOs, a tiny amount compared to mainstream capital markets.

Yet a growing number of institutional investors are reportedly increasing their exposure to crypto assets. For example, a survey published on May 2 by Fidelity Investments found around 22 per cent of institutional investors already have some exposure to digial assets, with most investment made over the past three years.

In Australia, Treasury is currently considering whether initial coin offerings require additional regulation.

A discussion paper published earlier this year recognised "a large number of ICOs have failed, and many have turned out to be scams or have raised money illegally from public investors due to non-compliance with regulatory obligations" and "the resulting 'wild west' notoriety of the ICO industry has challenged the reputation of some legitimate businesses, and even technologies, related to ICOs".

ICO "tokens" come in many varieties, including one offering the right to a promised future cash flow of an underlying business. This is known as an equity or asset token and is considered a financial product under corporations laws. However, some tokens, known as utility or access tokens, can also give the right to access a future product or service.

The legal status of these tokens is unclear, but ASIC considers them managed investment schemes, requiring comprehensive requirements for audits, trustees and disclosure documents that are overly complex and costly for very early-stage companies.

ASIC has targeted ICOs for misleading conduct under existing consumer laws.