9 Aug, 2021

Cryptocurrency, Mining, ICO Guidelines Released by Australian Securities Regulator

The Australian Securities and Exchange Commission (ASIC) published new guidelines on initial currency offering (ICO) and encryption on its official websites on 30 May.

The regulator analyzed the requirements for an encryption company to comply with both Australian companies and ASIC operations, but did not cover regulations applied by other national agencies. In particular, the guideline specifies that if a cryptographic asset is a financial product, then the issuer and the companies involved in it are required to hold an Australian financial services license.

The report also notes that the miners will be considered part of the clearing and settlement process at least in some cases:

“Where miners and processors are part of the clearing and settlement (CS) process for brands that are financial products, Australian law applies.”

The regulator also noted that “entities and their advisers must consider all rights and characteristics of the ICO (regardless of how it is named and marketed) to determine whether the cryptographic element is a financial product or further specifies that exchanges managing such assets should also be licensed, as the guidelines note:

“Businesses that offer encryption services or offer encrypted assets should conduct appropriate investigations to make sure they comply with all relevant Australian laws.”

Finally, ASIC also noted that the Know the Client and Anti-Money Laundering standards apply to cryptographic assets as well as Australian Consumer Law, including cases where the assets are issued or managed overseas.

Is an ICO a Managed Investment Plan?

As Cointelegraph announced earlier this week, ASIC warned the public that the OneCoin crypto program “could be involved in fraud”.

At the end of April, the Australian Tax Service, the Australian Tax Service, confirmed that it would seek to personally contact clients with tax-related encryption as part of a new data collection system.