The release of the Australian securities regulator’s guidance framework for initial coin offerings (ICOs) is an important step forward for startups looking to crowd-fund a project using digital currencies, and could help further worldwide regulatory discussions on the issue.
On 28 September, the Australian Securities and Investment Commission (ASIC) released detailed information about the potential application of Australian corporations law to businesses that are considering raising funds through an ICO.
Danielle Szetho, CEO of Australia’s fintech industry association FinTech Australia, said ASIC’s announcement was recognition of the importance of ICOs as a mechanism for start-ups raising funds.
In addition, she said it spoke of the regulator’s willingness to adopt a collaborative approach towards working with the fintech community, who are looking to either assist or engage in crowd-funding through ICOs whilst also meeting their regulatory obligations.
“This is the clarification we have all been waiting for, and I feel it strikes a very good balance between helping start-ups looking to run an ICO in Australia while at the same time informing and protecting potential investors,” Ms Szetho said.
“The guidance ASIC has released is a positive step to ensure a viable future for ICOs in Australia, and sits alongside other positive initiatives such as removing double taxation on digital currencies and driving international blockchain standards.”
Ms Szetho said the fintech community approved of the approach taken by ASIC in its guidance, as the many examples provided made it clearer which regulations might apply to startups seeking to undertake an ICO from Australia, or to market their ICO tokens to Australian investors.
According to Ms Szetho, ICOs are a nuanced subject matter when it comes to regulatory provisions because they could potentially be classified as one of a variety of financial instruments, depending on how the tokens are designed. This made it more challenging for regulators to provide a holistic and consistent framework that encompassed how ICOs should be regulated.
Leigh Travers, CEO of blockchain technology company DigitalX stated:
“We are pleased to see ASIC’s recognition of the important contribution ICOs can make to Australian businesses looking to raise funds and the new investment option that it make available to investors.
“We also see ASIC’s welcoming commentary to help innovative firms understand the framework as a further sign that Australia is leading the way in adopting a positive outlook towards Blockchain adoption.
“The general principle that ICOs utilising the App Coin or Utility Coin model are only subject to general law and consumer law while ICOs that are securities needing to comply with the Corporations Act seems to be appropriate.
“The guidelines also show the need for more detailed consultation with industry to get the model right.”
Blockchain consultancy and marketing firm ICOPromo CEO Sergei Sergienko echoed these statements, saying the blockchain community in Australia was keen to continue working with ASIC on this to ensure that any regulation was in step with the current climate surrounding ICOs for start-ups across Asia Pacific.
“It’s very commendable that ASIC is looking intently at ICOs and are taking a calm and measured approach to help provide guidance to interested parties in Australia,” he said.
“This is certainly a welcome announcement as it shows the regulator is listening and are being proactive in taking a collaborative approach to working with the blockchain start-up community in Australia.”
FinTech Australia also welcomed ASIC’s launch of a consumer-facing publication on ICOs on their MoneySmart website in a move aimed to ensure investors can make better informed decisions when it comes to participating in speculative investments such as initial coin offerings.
ASIC’s Regulatory Guide for ICOs can be found here.
- European Commission Releases New Support Paper on Blockchain – Further Funding for Startups Encouraged - September 19, 2019
- Bitpay Opens Up Doors For Ethereum Payments - September 16, 2019
- Neufund Launches Blockchain-Driven Equity Token Sale for Retail Investors Out of Lichtenstein - September 16, 2019
- London Blockchain Accelerator Academy Looking for Partners - September 13, 2019
- Blockchain Startup Blockstack Raises a Whopping $23 Million In SEC-Qualified Reg A+ Token Offering - September 12, 2019
- France Vows to Block Facebook Libra Cryptocurrency in Europe - September 12, 2019
- R3 and Mastercard Team Up Mastercard to Build Overseas Payments System Build on Blockchain - September 12, 2019
- ConsenSys Officially Joins Hyperledger Project – Adding Public Blockchain Capability to Hyperledger - September 11, 2019
- Telegram Open Network Labs Releases Development Suite for TON Blockchain - September 11, 2019
- Whale Alert: USD One Billion+ BTC Was Transferred in One Transaction Last Week - September 11, 2019
- New Professional API Trading Program AlgoX Prime API Launched by eToroX - September 11, 2019
- Bitcoin.com’s Roger Ver Steps in to Operate Node on Cryptographer David Chaum’s New Elixxer Project - September 11, 2019
- Seychelles Heats Up With a First for a National Stock Exchange – MERJ Exchange Goes Live with Tokenized IPO - September 10, 2019
- Computing Legend Steve Wozniak To Launch Blockchain Energy Project – EFFORCE - September 10, 2019
- Hollywood Star Wesley Snipes To Tokenize $25 Million USD Movie Fund with Liechtenstein Blockchain Innovator LCX - September 9, 2019
- Netki Extends TransactID Solution For FATF “Travel Rule” Compliance - September 9, 2019
- Market Demand For Sophisticated Crypto Trading Methods Drives Singapore’s Broctagon Fintech Group To New Heights – Pushing Them Past $5 million - September 5, 2019
- London-based Custodian For Digital Assets, Copper, Reach $500m In Transactions In Just Three Months - September 5, 2019
- UN Meeting: Gibraltar Lawyers Call For A Global Regulatory Framework For Cryptocurrencies - September 4, 2019
- Michael Terpin’s BitAngels Investor Network Partners with Bitcoin Bay to Expand Blockchain Investment Ecosystem in Toronto, Canada - September 3, 2019