The Australian Securities and Investments Commission (ASIC), has warned investors on “misleading” Initial Coin Offerings (ICOs) and crypto-asset funds.
The warning was issued in a bulletin, published Thursday, September 20, on ASIC’s official website.
The document reports that since April, 2018, ASIC has stopped five different ICOs from raising capital, while noting that they lack appropriate investor protection measures on the part of the fundraisers in question.
More so, the offerings have to be restructured to meet existing legal standards. In September, one ICO was ordered to shut down permanently due to safety concerns, the ASIC report added.
The prevailing problems currently faced by the ICO market, accorsing to ASIC, are “misleading or deceptive statements in sales and marketing materials” and unregistered investment schemes that do not hold Australian financial services licence.
However, ASIC further advised Australians to always consult with MoneySmart – a website it runs to educated potential investors on various financial matters before investing in ICOs.
Explaining the agency’s main concerns about ICOs, John Price, ASIC Commissioner said:
“If you raise money from the public, you have important legal obligations. It is the legal substance of your offer – not what it is called – that matters. You should not simply assume that using an ICO structure allows you to ignore key protections there for the investing public and you should always ensure disclosure about your offer is complete and accurate.”