Australia's financial observer, the Securities and Investment Commission (ASIC), issued a warning of "misleading" Initial Coin Offers (ICO) and crypto-currency funds intended for retail investors.
The document was published on Thursday, September 20, on the official website of ASIC. The commission stopped collecting capital from October 2018 from 5 different ICO projects. This was done because of the absence of appropriate measures to protect investors.
According to the institution, these proposals should be restructured in accordance with existing legal standards. In September, an ICO project was completely discontinued due to security problems.
The document also outlines the main problems that currently dominate the ICO market. Among them are "misleading statements about sales and marketing materials" and unregistered investment schemes that do not contain a license for financial services in Australia.
The commission advised residents of the country to consult MoneySmart, a website managed by the regulator himself, in order to gain an understanding of how the ICO works before investing in them.
Explaining the main concerns of the agency regarding this fund-raising, Commissioner John Price said:
"If you collect money from the public, you have important legal obligations. You should not simply assume that the use of the ICO structure allows you to ignore key protection measures for the public and you should always be able to openly provide information about your offer available to everyone. "
