Australian Securities Watchdog Updates Guidance on ICOs and Crypto Assets

ASIC, the Australian securities regulator, has updated its guidance for businesses involved with initial coin offerings and crypto assets.

AccessTimeIconMay 30, 2019 at 12:45 p.m. UTC
Updated Sep 13, 2021 at 9:15 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The Australian Securities and Investments Commission (ASIC) has issued updated regulatory guidance for businesses involved with ICOs and crypto assets.

Thursday, the guidance details the legal obligations for cryptocurrency firms under the country’s Corporations Act, the ASIC Act and other laws.

“These regulatory requirements are in place to maintain the integrity of Australia’s financial market and ensure consumer protection,” the regulator said.

ICOs and crypto assets in many cases are financial products or involve financial products that are regulated under the Corporations Act, according to ASIC. Therefore, if a firm is issuing a token that falls within the definition of a financial product (such as an interest in a managed investment scheme or a security), laws will apply, including the requirement to hold an Australian financial services (AFS) license.

Laws also cover those giving advice, dealing, or providing other intermediary services for crypto-based financial products.

Cryptocurrency wallet and custody service providers, on the other hand, need to ensure they hold the appropriate custodial and depository authorizations. Cryptocurrency miners, if assisting the clearing and settlement of tokens that are financial products, are also bound by Australian laws.

Cryptocurrency exchanges and trading platforms also need to comply with applicable rules, including holding an Australian market license, while cryptocurrency payment and merchant service providers are required to apply for an AFS license if they are providing “non-cash payment facility," as well as complying with a number of laws.

John Price, ASIC commissioner, 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."

For ICOs and crypto assets that are not financial products, promoters must ensure that they do not engage in misleading or deceptive conduct or statements, ASIC said.

ASIC first issued regulatory guidance for ICOs in 2017. At the time, rules were mainly focused on Australian consumer law and the country’s Corporations Act.

Australian flag image via Shutterstock 

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.