The Australian Securities and Investments Commission or ASIC issued a warning Thursday, September 20, on ‘misleading’ ICO’s or Initial Coin Offerings and cryptocurrency-asset funds aiming at retail investors.
In a media release by ASIC, The Australian regulating body has identified at least three consistent problems which involved significant risks to investors. One is the deceptive sales and marketing statements on marketing materials. Recently, ASIC has stopped the release of a Product Disclosure Statement for a crypto investment scheme.
Another problems seen by ASIC are firms illegally operating an unregistered investment schemes. Lastly, firms that doesn’t have a licence from the Australian Financial Services.
According to John Price, ASIC Commissioner , ‘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.’
Further, ASIC advised investors to know more about ICO’s on MoneySmart which is an information page run by the financial watchdog
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