The Australian securities regulator has published new guidance aimed at companies involved in promoting cryptocurrency assets and ICOs, in an attempt to bring greater regulatory clarity to the sector.
The Australian Securities and Investments Commission (ASIC) released the updated guidance Thursday, which spells out the legal obligations cryptocurrency firms must discharge to operate lawfully, covering the ASIC Act, the Corporations Act and other applicable laws.
In a statement, the regulator said the measures were necessary to protect consumers coming into contact with the industry. According to ASIC, “These regulatory requirements are in place to maintain the integrity of Australia’s financial market and ensure consumer protection.”
The new guidance explains that many activities relating to cryptocurrencies fall within the definition of financial products, which are regulated in Australia under the Corporations Act. Firms wishing to sell financial products are required by law to be licensed by the regulator.
The licensing requirements cover promoting securities, intermediary services, advising and dealing, while crypto wallet operators are subject to custodial and depository authorizations.
Interestingly, the laws also expand far enough to catch crypto miners, who are subject to similar regulatory requirements under Australian law.
It is thought that a number of companies will find themselves on the wrong side of the law following the publication of the updated guidance, at a time when regulators worldwide are tightening up the rules around ICOs and crypto assets.
ASIC Commissioner John Price said the rules also take effect on companies operating from overseas.
“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,” Price noted.
ICOs in particular have been the focus for a number of crypto scams, with investors losing fortunes in failed ICO investments. Regulators around the world are increasingly ratcheting up licensing requirements on crypto operators, as they look to reduce the risks posed to unsuspecting consumers and investors.
With the new guidance, the regulator hopes to have moved a step further towards addressing the fundamental problems affecting many ICOs and crypto asset sales.
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