Australia’s ASIC 2018-2022 Corporate Plan Reflects Growth of Blockchain and ICOs

September 11

Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC) has released its 2018-2019 to 2021-2022 corporate plan (the Plan), articulating the regulator’s short and medium term strategic vision and focus. Cryptocurrencies, ICOs and blockchain featured as part of the Plan, reflecting their growing relevance for ASIC in protecting investors and markets.

In summary, the Plan:

  • acknowledges the significant impact that blockchain and distributed ledger technologies (DLT) are likely to have on Australia’s financial services industry;
  • identifies the innovations ASIC sees blockchain bringing, namely in middle and back-office functions that increase efficiencies in data collation, settlements and clearance functions; and
  • acknowledges that the growing popularity of ICOs to raise funds has attracted its increased regulatory attention and monitoring.

In a positive for the blockchain industry, ASIC reiterates that it remains focused on promoting innovative developments with blockchain and DLT. ASIC appears keen to support the use of blockchain and DLT in the financial services industry, citing the Australian Securities Exchange’s CHESS replacement plans to utilise DLT for its settlement functions from 2021.

However, it is clear that ASIC remains vigilant where blockchain projects may affect retail investors. In particular, one of ASIC’s ‘new projects’ mentioned in the Plan suggests that ASIC will increase its monitoring of cryptocurrency exchanges. Individuals planning on launching ICOs or cryptocurrency exchanges in Australia should expect ASIC to:

  • continue developing its framework for regulating crypto exchanges; and
  • actively intervene in ICO or blockchain projects that threaten to cause harm to consumers and retail investors.

This follows ASIC’s updated information guidelines (Info 225 – updated in May 2018) where ASIC reiterated that it had received delegated powers from the Australian Competition and Consumer Commission to apply misleading and deceptive conduct standards to crypto-assets.