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Australian Securities Exchange Considering Framework to Regulate Initial Coin Offerings

Chairman of the Australian Securities Exchange (“ASE”) Greg Medcraft said this week that the group is looking at various options to regulate ICO tokens.

Medcraft pointed out that the ASE’s current view towards cryptocurrencies is that they are closer to commodities rather than currencies. He also noted that ICO tokens could very well been interpreted as securities in the near future.

"They’re a very interesting concept.  An ICO is not equity – you're offering basically something that is the product of the entity that is doing the launch.  You're taking a bet on getting that product early.  How different is that if I go to Kickstarter and I buy something – a watch – and then I get that watch and sell it in the future? It's no different, is it?”

 “If [ICOs] do come within our mandate, we would essentially take a technology neutral approach and say, 'Alright, how can we get comfortable about the disclosure of the party issuing the coins? Have the risks been properly disclosed that are related to it? Are there particular conflicts of interests by the issuer?”

On a positive note, Medcraft seemed to have a constructive attitude towards a cryptocurrency backed by a central bank- which could cripple their use for money laundering and the black market. However, this could also lead to a more centralized payment system and would remove things such as anonymity currently associated with digital currencies.

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