Australian Government Publishes Update on Cryptocurrency and ICO Rules

The Australian Securities and Investments Commission (ASIC) has published an update on how it intends to regulate crypto-related businesses and initial coin offerings (ICOs).In this guideline, the financial regulator outlines requirements that need to be followed for cryptocurrency businesses to be compliant with the ASIC Act.This update is noteworthy as the country continues to battle crypto scams, losing almost $4.3 million in 2018.Going forward, companies issuing crypto assets deemed to be financial products will be required by law to procure an Australian Financial Services (AFS) license. On the flipside, for crypto assets which aren’t financial products, promoters must ensure that they don’t engage in any form of deceptive advertising.According to the Corporations Act, an ICO could be a financial product if it's a "managed investment scheme, security, derivative or non-cash payment (NCP) facility," ASIC explains.Exchanges that manage and offer trading of these assets would also be required to follow the new guidelines, including holding an Australian market license, unless covered by an exemption.In instances where miners could be considered as a part of the clearing and settlement processes for financial products, Australian laws will apply.In part, the release notes, “Businesses offering crypto-assets, or offering services in relation to crypto assets, need to undertake appropriate inquiries to satisfy ...