ASIC updates crypto-asset guidance – it’s one small step for man…
by Michael Bacina, Parter, Piper Alderman
On Thursday 30 May 2019, ASIC updated its guidance on initial coin offerings (ICOs) and crypto-assets. Since being last updated in May 2018, INFO225 has become more comprehensive and now specifically refers to more business models, with a number of new examples included in order to provide readers with a better idea of how ASIC will likely treat their use of crypto-assets.
Partner, Michael Bacina, and lawyer, Tom Skevington, review the updated guidance and what it means for participants in the blockchain and crypto-asset industry.
Despite these updates, INFO225 might be said to represent one small step for man, with a giant leap yet to be made in regulatory treatment to embrace blockchain concepts such as smart contracts and crypto-currencies in Australia (and likely a leap that only Parliament or Treasury can take). The equivalent guidance released by the UK, Singapore and Switzerland provides clearer categorisation of tokens and paths forward for the issue of cryptographic tokens in those jurisdictions, a point not missed by ASIC in this guidance.
INFO225 has been renamed to include a consideration of crypto-assets, rather than only crypto-currency, indicating a broadening of the intended guidance and acknowledging the changing nature of the crypto-asset market away from ICO offerings of cryptocurrencies and towards tokenized funds and Security Token Offerings (STOs)
ASIC identifies at the start of INFO225 stakeholder groups and ASIC Regulatory Guides which cover the potential obligations of those stakeholders. These groups include:
- Issuers of crypto-assets;
- Crypto-asset intermediaries;
- Miners and transaction processors;
- Crypto-asset exchange and trading platforms;
- Crypto-asset payment and merchant service providers; and
- Wallet providers and custody service providers.
When could an ICO be or involve a financial product?
Reiterating that Australian laws will apply to all token issues, regardless of what the label of the offering, INFO225 expands on the earlier guidance to provide further details of when ASIC will consider the characteristics of the ICO or token to indicate that the offer is of an interest in a managed investment scheme, a security, a derivative or a non-cash payment facility.
In doing so ASIC has provided some examples of laws or regulations applicable to each financial product.
To read more, please click on the link below…