It is good to see Australian regulators crack down on initial coin offerings. While most of these projects are legitimate, there will always be certain risks. The Australian Securities and Investments Commission now has official guidelines for ICOs. This only affects projects organized in Australia itself, though. Anyone living in the country, but investing in foreign ICOs may not necessarily be protected by these new rules for the time being.
Official Guidelines for Initial Coin Offerings
More specifically, token sales in Australia are regulated under general consumer law. That in itself is a rather interesting decision, to say the least. There is one requirement, though, as these companies may not offer financial products whatsoever. It will be hard to classify which projects do or don’t in this regard. After all, a lot of projects create value out of thin air, which makes every token a financial product of sorts.
Investors will enjoy a certain degree of protection when it comes to ICOs. However, any project not meeting its initial goals will not be subject to these rules. That is a problematic way of handling things, to say the least. There is no reason for local projects not to raise money, deliver part of the goods and then take off with the money. It is expected this part will need further clarification sooner rather than later.
In the end, some of the responsibilities lie with investors themselves as well. It is their job to investigate every ICO before making a financial contribution. That is easier said than done, as most people don’t even read a whitepaper or announcement. This lack of attention will cost a lot of people some good money in the long run. For now, it remains to be seen how things play out in Australia and the rest of the world. Initial coin offerings are still a major risk, to say the least.
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