Examining Australia's Updated Regulations for ICOs and Crypto Trading

These new guidelines are aimed at helping cryptocurrency-related businesses understand their compliance requirements vis-à-vis existing laws contained in the Australian Corporations and ASIC Acts.The ASIC's revampled ICO and cryptocurrency trading framework does not cover guidelines for other regulators like the country's tax agency and consumer protection group.

The first update to the document was back in April 2018.At the time of publishing its first ICO guidelines, the ASIC said it wanted token issuers to be aware of the potential applications of the country's Corporations Act of 2001 to ICOs.

Rather than reinventing the wheel, the ASIC set forth modalities with which token issuers could apply already existing financial regulations to their cryptocurrency offerings.

Apart from intimating stakeholders about the legal requirements for ICOs and cryptocurrency trading, in 2017, the ASIC also wished to convey important points about the risks inherent in digital currency investments.

New ASIC guidelines for ICO and crypto tradingFast-forward to 2019's update and the ASIC seems to be laying out the groundwork for a more comprehensive regulatory environment.

The ASIC's new governing principles for cryptocurrencies create an avenue for nonfinancial ICOs to exist.

For the ASIC, the important consideration for ICOs deemed to be managed investment schemes are the "Rights" held by token owners.

Having created a framework that broadly classified ICOs as managed investment schemes, the ASIC also provided some details about token offerings deemed to be securities.

Being similar to IPOs, the ASIC mandates security token issuers to prepare prospectuses and follow all the licensing, registration and compliance requirements that apply to IPOs.Since most ICO tokens would be deemed financial products under the ASIC's newly updated regulatory paradigm, cryptocurrency exchanges may face extra compliance and licensing requirements.

"We can state categorically that as a matter of company policy the Zebpay platform only lists tokens that ASIC regards as digital currencies, and we do not anticipate deviating from this company policy for the foreseeable future. We have not seen anything in the most recent changes which suggest there has been any change to that position. ASIC has previously confirmed that trading platforms that confine themselves exclusively to the trading of digital currencies are not, in their view, a financial market or purveyor of financial services."