ASIC provides guidance on crypto-assets – Lexology

ASIC provides guidance on crypto-assets – Lexology

On 29 October 2021, the Australian Securities and Investments Commission (ASIC) released Information Sheet 225: Crypto-assets (INFO 225) to provide guidance on the application of the Australian financial services regulatory regime under the Corporations Act 2001 (Cth) (Corporations Act) to crypto-assets and initial coin offerings (ICOs).

INFO 225 states that crypto-assets and ICOs could be financial products, and if they are, that they are likely to be managed investment schemes, derivatives or securities. Crypto-assets and ICOs may also involve a non-cash payment (NCP) facility. If conduct in relation to crypto-assets or an ICO involves a financial product, the Australian financial services regulatory regime will apply. This means that entities involved with crypto-assets or an ICO will need to consider whether an Australian financial services (AFS) licence, an Australian markets licence or a clearing and settlement facility licence is required. Participants will also need to consider whether any disclosure or the design and distribution obligations apply in relation to the crypto-assets or ICO. All participants must be mindful of the general prohibition on engaging in misleading and deceptive conduct.

Apart from indicating that crypto-assets and ICOs are clearly on ASIC’s regulatory radar, INFO 225 provides little insight or concrete guidance to participants in the crypto-asset and ICO industry.

Background

On 30 June 2021, ASIC issued Consultation Paper 343: Crypto-assets as underlying assets for ETPs and other investment products (CP 343) to seek industry feedback on the regulation of crypto-assets and their use as an underlying asset
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