Australia’s Securities Watchdog Halts Five Misleading ICOsbr>
The Australian Securities and Investments Commission (ASIC) has taken action against misleading initial coin offerings (ICO), which have targeted local retail investors.
In a statement issued last week, the ASIC said that since receiving delegated powers from the Australian Competition and Consumer Commission (ACCC) in April of this year, it has successfully prevented five ICOs from raising capital without the appropriate investor protections. According to the commission, the unnamed ICOs have been put on hold and some will be restructured to comply with the applicable legal requirements.
“If you raise money from the public, you have important legal obligations,” said ASIC Commissioner John Price. “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.”
The agency also issued a final stop order on a Product Disclosure Statement (PDS) issued by Investors Exchange Limited (IEL) for units in the New Dawn Fund (Fund), which was proposing to invest in a range of crypto assets. Following ASIC raising concerns about the PDS, IEL consented to a final stop order so that no units could be obtained under the PDS.
“An ICO is a highly speculative investment that could be a potential blockchain project or it could be a scam,” the ASIC said. While the potential returns may look attractive, these projects are mostly unregulated and the chance of losing your investment is high.”