Crypt-assets and ICOs Involve Financial Products

June 3, 2019

A report reveals that the Australian Securities & Investment Commission is focusing on businesses who carry out ICOs and crypto-assets. The reason for the publication is to inform them about the legal obligations which they must meet to operate legally. We learned that the commission had updated it “Information Sheet 225” ICOs & crypto-assets (INFO 225). The basis for this update was the experience of ASIC with crypto-assets and initial coin offerings.

From what we gathered, the experience shows that crypto-assets and ICOs will often be or involve financial instruments. These financial products are the ones under the regulations of the Corporations Act.

Businesses Must Endeavour To Comply With Australian Laws


The commissioner of the Australian Security & Investment Commission, John Price, also made some statements about the industry. According to Price, every business engaging in crypto-assets or any services that relate to crypto-assets must cover their bases. He advised them to undertake necessary inquiries to be sure that they are not operating illegally. They must check if they satisfy the requirements of the Australian Laws governing such activities.

John also pointed out that every financial product is under the Australian Consumer Law. It doesn’t matter whether it raise funds or not. Once the commission suspects any deceptive or misleading conduct, the product will be accountable.

Applications Of The Australian Laws


Other areas of application are where crypto-assets or ICOs reaches the Australian market from offshore. Even if the promotions were in other countries and consumers also get them from outside Australia, the laws apply. Price, therefore, advise issuers of ICOs and Crypto-assets not to think that the laws don't apply in these scenarios.

From what we also gathered, everybody dealing in any aspect of ICOs or crypto-assets has to answer to the Consumer laws. For instance, people who issue crypto-assets, which falls under financial products will obey the Australia Consumer laws. Also, they must hold an AFS license.

Also, crypto-asset intermediaries are to operate under the laws as well. Anybody who deals, advice or provides such services for people who patronize crypto-assets must obey relevant laws. They also need the Australian financial services license.

The next people are those who mine and process transactions. They must bear in mind that the Australian laws apply to them in some cases. If their activities facilitate the clearing & settlement process for those tokens under financial product, the laws apply.

Trading and exchange platforms for crypto-assets are not left out either. If the platform deals on any of the crypto-assets under financial products, the laws apply. According to the commissioner, the operators must hold a market license to enable them to operate in Australia. They may also need to get a clearing and settlement license depending on their CS processes. 

ASIC also mentioned that dealers who provide merchant and payment services for crypto-assets need to hold a license. Also, they will need to abide by some Australian laws guiding their operations.

Finally, custody service and wallet service providers must get the appropriate depository authorizations. That is if the tokens they store are under financial products. 

Author: Ali Raza for: Crypto-Rating.com
Cryptocurrency: Ethereum

Renewable Energy Fuels 74% of Mining
Renewable Energy Fuels 74% of Mining

Earlier this month, CoinShares, a well-regarded crypto investment and research company from the United Kingdom, published a report on the current state of the...

KIN Token Taken down from CoinFalcon
KIN Token Taken down from CoinFalcon

The KIN token saw a major price drop after CoinFalcon's recent announcement, which stated that the asset is soon to be delisted. While the exchange is not among...

France Comes up with a Way to Permit Utility ICOs
France Comes up with a Way to Permit Utility ICOs

The cryptocurrency and blockchain situation in Europe continues to progress, with France, in particular, currently making moves to embrace the blockchain and start issuing...

Awaiting Facebook Whitepaper on June 18
Awaiting Facebook Whitepaper on June 18

It appears that the long-rumored launch of Facebook’s own cryptocurrency is just around the corner. Laura McCracken, the Head of Financial...


Japan Tightens Oversight of Crypto Economy
Japan Tightens Oversight of Crypto Economy

Japanese crypto market has entered a new spiral of development following the amendments to the cryptocurrency regulations which had been subject...

New Beginnings After Crypto Winter For ICOs
New Beginnings After Crypto Winter For ICOs

According to what analysts are saying, the recent market rally in the cryptocurrency industry is helping ICOs boom. The sentiments from the investors seem positive...

Crypto Markets Move For A Reason
Crypto Markets Move For A Reason

There are times when market movements seem mysterious, especially when no one can explain the reason behind it. However, we have also seen that many times...

AT&T Accepts Crypto via BitPay
AT&T Accepts Crypto via BitPay

To paraphrase the famous quote by Neil Armstrong, that’s one small addition to payment options by one corporation, one giant leap for the entire industry. This refers to the official press release...