The Australian Securities and Investments Commission’s (ASIC) new warnings on appropriate financial influencer behaviour could have a significant impact on the local crypto industry. ASIC’s recent Information Sheet outlines the pitfalls that influencers and the companies that hire them may fall into when promoting financial products, whether intentionally or unintentionally. Failure to heed ASIC’s warnings could result in fines of millions of dollars for corporations and up to five years in prison for individuals.
Although it does not specifically mention cryptocurrency influencers, the guidelines do apply to them because cryptocurrency investing services are considered financial products. ASIC advice financial influencers or ‘finfluencers’ who are unsure whether their brand is breaking the law to “Think about your content carefully and whether you are providing unlicensed financial services.”
One point of doubt in the new rules is precisely what constitutes promotion as opposed to innocuous financial product information. On March 29, financial blogger Dave Gow of Strong Money stated, “Writing almost anything could influence someone to invest or use any financial product.”
Senator Bragg is a supporter of clearer crypto regulations, and at Australia Blockchain Week last month, he unveiled an ambitious new proposal concerning decentralised autonomous organisations (DAO).
As an unlicensed financial influencer, Gow objects to restrictions on what they can and cannot do, which includes making any kind of recommendation. He went on to say that the rule restricts influencers to “repeating what you can read elsewhere” and harms the investor knowledge base. “How does that help you wade through the sea of information and nonsense out there?” he asked.
As part of Australia’s Corporations Act, individual influencers must beware of how they promote financial products, while corporations must also keep a close watch on their hired influencers to ensure no rules are broken. The commission offers several case studies that provide context that could help identify whether an individual or company is promoting financial services.
Individual influencers must be cautious about how they promote financial products under Australia’s Corporations Act, while corporations must keep a close eye on their hired influencers to ensure no rules are broken. The commission provides several case studies that provide context that may aid in determining whether an individual or company is promoting financial services.
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