Crypto ‘Influencers’ In Australia Are Now Subject To New Legal Restrictions
The Australian Securities and Investments Commission is pursuing action against financial influencers who they believe are misleading the general public about cryptocurrency.
The Australian Securities and Investments Commission (ASIC) has issued new cautions about appropriate conduct for financial influencers, which could have a significant impact on the local crypto business.
ASIC’s latest Information Sheet details the pitfalls that influencers and the organizations that hire them may fall into while advertising financial products, whether intentionally or unintentionally. Failure to heed ASIC’s warnings could result in fines of millions of dollars for businesses and up to five years in prison for individuals.
Gow’s assessment is based on the somewhat nebulous distinction ASIC has made between objective facts about a financial product and the way in which influencers may present them. It states:
“If you present factual information in a way that conveys a recommendation that someone should (or should not) invest in that product or class of products, you could breach the law by providing unlicensed financial product advice.”
Australian Liberal Senator Andrew Bragg believes there is an incongruence between the new ASIC guidelines and how crypto is regulated in his country
He believes that under current laws, the crypto industry should be exempted from these new restrictions. He told:
“ASIC’s current policy applies the law to crypto to the extent that digital assets fall within the definition of a financial product. Crypto is currently unregulated and not a financial product… I believe we can do more.”
Senator Bragg is a proponent of clearer crypto regulations, and recently introduced an ambitious new proposal concerning decentralized autonomous organizations (DAO) at Australia Blockchain Week last month.
As someone who may now be considered an unlicensed finfluencer, Gow takes exception to restrictions on what they now may not do, which is make any sort of recommendation. He added that the rule limits influencers to simply “parroting what you can read elsewhere” and harms the investor knowledge base. He stated, “How does that help you wade through the sea of information and nonsense out there?”
Individual influencers must be cautious about how they advertise financial products under Australia’s Corporations Act, while corporations must keep a tight eye on their hired influencers to ensure no restrictions are broken. The commission provides many case studies that provide context for determining whether someone or a company is pushing financial services.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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