Initial coin offerings (ICO) will be a "key focus" for Australia's corporate watchdog as it looks to update guidance on companies considering raising funds by issuing digital coins or tokens, a top official said on Thursday.
The Australian Securities & Investments Commission will expand the scope of its guidance in coming weeks to include more questions and details on ICOs, Commissioner John Price flagged in a speech in Sydney. "We will highlight that Australian corporate and consumer law might apply - even if the ICO is created and offered from overseas," Price said at a FinTech event.
"This is an important point given the international nature of this sector. I think you can expect a strong focus from us in this area." ASIC will also highlight information on how Australian law prohibiting misleading or deceptive conduct will apply in this space.
The cryptocurrency or ICO market is still small in Australia but Price said there was a "certain level of opportunism... because it is seen as an easy, low regulation, low cost option which could lead to immature businesses coming to market." ASIC is wary that the stories that come out about such businesses will have a negative impact on investor confidence over time, Price added.
ICOs are popular with start-ups as a way to finance projects. But regulators in several countries including China and South Korea are trying to rein in the global boom in trading bitcoin and other cryptocurrencies. South Korea prohibited ICOs in September but they are creeping back into the country by using overseas listings for local trading.
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