Australian law prohibits misleading or deceptive conduct in a range of circumstances, including in connection with financial services, and in relation to a financial product.
What is misleading or deceptive conduct in relation to an ICO or crypto-asset?
Australian laws and regulations that prohibit misleading or deceptive conduct may apply even if an interest in an ICO or crypto-asset is issued, traded or sold offshore. It is a serious breach of Australian law to engage in misleading or deceptive conduct.
Care should be taken to ensure promotional communications about a crypto-asset or ICO do not mislead or deceive potential consumers and do not contain false information.
ICOs and crypto-assets that are not financial products
For ICOs and crypto-assets that are not financial products, the same prohibitions against misleading or deceptive conduct apply under the Australian Consumer Law.
Conduct that may be misleading or deceptive to consumers can include:
ICOs and crypto-assets that are financial products
For ICOs and crypto-assets that are financial products, the ASIC Act and the Corporations Act include prohibitions against misleading or deceptive conduct.
Past performance information should be accompanied by a warning that past performance is not indicative of future performance. Forecasts about the future performance of a financial product should be based on reasonable assumptions and should also state that the forecasts are not guaranteed to occur.
Warnings, disclaimers and qualifications should not be inconsistent with other content in an advertisement, including any headline claims. Warnings, disclaimers and qualifications should have sufficient prominence to effectively convey key information to a reasonable member of the audience on first viewing the advertisement. Consumers should not need to go to another website (or other page of the website) or document to correct a misleading impression.
Advertisements should be capable of being clearly understood by the audience that might reasonably be expected to see the advertisements. Advertisements should not state or imply that a product is suitable for types of consumers unless the promoter has assessed that the product is suitable for that class. Advertisements for complex products that are only appropriate for a limited group of people should not be targeted at a wider audience.
ASIC has been delegated powers from the ACCC to, in coordination with the ACCC, respond to potentially misleading or deceptive conduct relating to crypto-assets which affect Australian consumers.