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Thursday 28 September 2017

17-325MR ASIC provides guidance for initial coin offerings

ASIC today released guidance to help issuers of initial coin offerings (ICOs) consider their legal obligations when offering coins or tokens.

ASIC Commissioner John Price said 'We want to ensure innovative firms understand the regulatory framework they may be operating under and ensure they meet any obligations they may have when raising funds in Australia.'

ASIC and the Australian Competition and Consumer Commission (ACCC) also jointly warned people of the potential risks of investing in ICOs.

'ICOs are highly speculative investments, are mostly unregulated and the chance of losing your investment is high" ASIC Commissioner John Price said. 'Consumers should understand the risks involved, including the potential for these products to be scams, before investing.'

Information sheet 225 provides guidance about the potential application of the Corporations Act 2001 to businesses that are considering raising funds through an initial coin offering.

ASIC's MoneySmart website has also published guidance for investors on the risks of investing in initial coin offerings.

Background

ASIC is focused on the vital role that innovative businesses are playing in re-shaping financial services and capital markets. In addition to developing guidance about how these new developments fit into our regulatory framework, in 2015, ASIC launched its Innovation Hub to help fintechs navigate the regulatory framework without compromising investor and financial consumer trust and confidence.

The Innovation Hub provides the opportunity for entrepreneurs to understand how regulation might impact on them. It is also helping ASIC to monitor and understand fintech developments.

Innovative businesses can contact the ASIC's Innovation Hub for assistance in understanding the regulatory framework.