ASIC takes action against misleading ICOs

— 1 minute read

ASIC has taken action to stop several proposed initial coin offerings or token-generation events targeting retail investors.

Problems identified by ASIC are the use of misleading or deceptive statements in sales and marketing materials, operating an illegal unregistered managed investment scheme and not holding a financial services license.

ASIC commissioner John Price said such offers involve significant risks for investors.


“If you raise money from the public, you have important legal obligations. It is the legal substance of your offer - not what it is called - that matters. You should not simply assume that using an ICO structure allows you to ignore key protections there for the investing public and you should always ensure disclosure about your offer is complete and accurate,” he said.

Bit Trade managing director Jonathan Miller said this move does not come as a surprise from ASIC and he looked forward to working with the regulator to make a formal path for regulated token offerings. 

"We believe that Security Token offerings will be the next wave of innovation and look forward to working with ASIC to ensure that Australian companies and investors can take advantage of the technology," he said

Mr Miller said Australia had dropped the ball in its regulatory requirements for coin offerings but said there was room to move forward. 

"Other jurisdictions are already ahead of the game with this, with Malta partnering with Binance to create a regulated security token exchange. ASIC is the next logical step for Bit Trade and we look forward to sharing insights with them on how this technology can create efficiencies and more upside for both companies and investors," he said. 

Since April 2018, ASIC has acted against five other ICOs raising capital without the appropriate investor protections. 

These ICOs have been put on hold and some will be restructured to comply with legal requirements. 




ASIC takes action against misleading ICOs
investordaily image
ID logo
Eliot Hastie

Eliot Hastie

Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms. 

Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.

Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).

You can email him on: [email protected]

related articles

  • ‘We have a long battle ahead’: Byres

    APRA chairman Wayne Byres has told banks to prepare for the long haul and warned that the idea that the financial system will return to norm...

  • Stimulus must stay: Lowe

    RBA governor Philip Lowe has warned that withdrawing the massive fiscal stimulus risks destabilising the recovery at a critical point. ...

  • Court orders receivers to WA firm 

    The Federal Court of Australia has sided with ASIC over a case concerning an alleged unregistered managed investment scheme and a related co...

promoted stories

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.