The Australian regulatory body in charge of finance and securities is taking a tough stand against influencers who are seen to be churning out misinformation about cryptocurrency to the general public.
According to the Australian Securities and Investment Commission (ASIC), the new legal restriction is due to the conduct of financial influencers in Australia, which is against the tenets of business ethics and would have profound effects on the crypto industry.
The recent information reports from the ASIC outline the hefty penalties influencers and, by extension, companies that hire them would face if they are caught aiding and abetting the promotions and transactions of financial products.
As outlined by the Information Sheets from ASIC, the consequence of failing to abide by the new rules would see individuals facing up to five-year jail term, while corporations would cough out millions of dollars in fines.
Are Financial Influencers the Major Target?
The new law does not explicitly mention influencers working in the crypto space. Still, the guidelines apply to them as part of crypto service providers, which are also labeled as financial products.
In a move to clear the air for those influencers who are confused as to where their brand stands and whether it is in violation of the law, ASIC stated that that category of influencers should carefully think about their content and see if they are promoting unlicensed financial service providers.
Another gray area that seems confusing to many is the concept of promotion as against the mere informing people of a particular financial product. According to a financial blogger, Dave Gow, in one of his articles on March 29, “the mere act of writing anything can influence people to invest or use any financial product or services.”
Using Gow’s statement to assess the ASIC’s position, it can be said that the regulatory body has made a distinction between promoting a product and informing the public of the product. According to the ASIC, they are presenting factual information in such a way that shows a recommendation that a person should invest in a product or not, putting the influencer in a position that may likely be termed a breach of the law.
However, Senator Andrew Bragg is opposed to the new legislation saying that there is a disconnect between the new law and how the crypto industry is regulated in Australia. He believes that the industry should not be part of these new guidelines.
Crypto Industry Needs Separate Regulations
Senator Andrew Bragg sought to make a more precise statement o the issue by proposing new regulations for the crypto industry independent of other financial sectors.
The new proposal by Senator Bragg is an ambitious one that seeks to oversee the operations of decentralized autonomous organizations (DAO), which he presented last month during the Australian Blockchain Week.
In all, the newly released ASIC guidelines are part of Australia’s Corporations Act which requires both corporations and influencers to play within the range as approved by the law of Australia.