ASIC Tightens Rules for Crypto Promoting
The Australian Securities and Investments Commission (ASIC) has released a document with rules of “conduct” for financial influencers regarding the dissemination of information about crypto products.
ASIC treats crypto investment services as financial products and, in its newsletter, describes the potential pitfalls that influencers and companies promoting such products can fall into.
Ignoring ASIC warnings carries millions of dollars in fines for corporations and up to five years in prison for individuals.
That is why ASIC recommends that financial influencers or “influencers” in the financial industry who are unsure whether their brand is violating the law, carefully analyze and check their content for the fact of “providing unlicensed financial services.”
Strong Money financial blogger Dave Gow drew attention to the vague language in the document regarding promotion or other types of information about financial products. According to him, any social media post can influence someone to invest or use any financial product:
“If you present factual information in a manner that recommends that someone should (or should not) invest in that product or class of products, you may be breaking the law by providing unlicensed recommendations on financial products.”
Gou also believes that many industry experts are now unable to give any recommendations on cryptocurrencies, which damages the knowledge base of investors, limiting them from quality information and forcing them to wallow in a sea of useless information.
According to Australian Senator Andrew Bragg, there is a discrepancy between the new ASIC recommendations and how cryptocurrency is regulated in the country, so the crypto industry should not be controlled by these regulations for the time being, since cryptocurrency in Australia is not yet regulated and is not a financial product.
Under the Australian Corporations Act, individual influencers are required to monitor how they promote financial products. And corporations must also keep a close eye on the influencers they hire to make sure they don’t break the rules. The Commission also offered several examples of case studies that can help determine whether an individual or company is promoting financial services.
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