On 26 April 2018, John Price of the Australian Securities and Investments Commission (ASIC) highlighted in a speech that Australian corporate and consumer laws might still apply to ICOs created and offered from overseas, so long as they were offered and sold to Australian consumers. Mr Price warned that there was an incorrect perception that Australian regulations did not apply to activities engaged from overseas.
In addition, Mr Price mentioned that there was a certain level of opportunism that existed amongst businesses or people looking to undertake ICOs because they were seen as an “easy, low regulation and low cost option”. He recommended that people interested in undertaking ICOs consider ASIC’s guidance on the subject and seek proper advice to avoid regulatory risks and consequently negatively impacting on the credibility of the token-based products and services sector.
We note that Australian financial services licensing laws are already written to capture offshore activity which target Australian investors.
ASIC will update its Information Sheet 225: Initial coin offerings in the coming weeks with additional scope and answers to commonly-asked questions.