The Australian Securities and Investments Commission did a review of the ICO and said it wants to have a close watch on some “misleading” offerings which are targeted at the retail investors.
The Australian corporate watchdog added that similar actions have been taken by them against many such proposals earlier. The commission has stopped 5 Initial Coin Offerings since April this year. In certain cases, these offerings will be restructured for adhering to the Australian law while in one of the cases further action can be taken.
ASIC has consistently identified problems including the use of deceptive or misleading statements in these firms’ marketing and sales materials. Other problems include not holding the license required for Australian financial services and operating an unregistered and illegally managed investment scheme.
John Price, the ASIC Commissioner said that some Initial Coin Offerings feel that they need not adhere to the prevailing consumer protection laws. The scenario is quite reverse to that of a year ago when only a tiny group of crypto investors seemed to be enthusiastic about the ICOs instead of an opportunity for a publicly accessible investment now.
The Australian Securities & Investments Commission (ASIC) said that consistent problems with proposed ICOs included the use of “misleading or deceptive” statements in sales and marketing materials and not holding Australian financial services licenses, finder.com.au wrote.
ICO Review: Raising Public Fund Also Means Legal Obligations
The ASIC Commissioner also remarked that when a firm is all set to raise funds from the public, it is important to adhere to the legal obligations. According to him, the offer’s legal substance is more important than what it is named as. He added that some proposed Initial Coin Offerings operated unregistered and illegal investment schemes.
According to an ICO review, worldwide start-up companies raised several millions of dollars to fund their projects through the net. However, many of them had only a few staffs along with simply a business plan outline fetching regulatory attention, according to Reuters.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]