The Australian Securities and Investments Commission (ASIC) is set to place new restrictions against financial influencers believed to be misleading the public about cryptocurrency.
The regulator is reacting to the recent increase in promotional activities by crypto influencers that fail to tell their audience about the true nature of crypto investments.
The latest Information Sheet provides details about the penalties influencers and the firms that hire them will face when advertising financial products.
Violators Could Spend Five Years In Jail
ASIC added that failure to adhere to its warnings could result in penalties of millions of dollars for businesses and up to a 5-year jail sentence for individuals.
While the new law doesn’t specifically mention cryptocurrency influencers, it also applies to them since crypto investing is also seen as a financial product. The regulator has also warned the financial influencers who are not sure whether their promotions violate the law.
“Think about your content carefully and whether you are providing unlicensed financial services,” ASIC stated.
However, some people are still confused about the new rules as it concerns the difference between promotion and harmless information about financial products.
Crypto Shouldn’t Be Part Of The Law
Last week, a financial blogger from Strong Money Dave Gow stated that writing almost anything could influence someone’s decision to invest or use any financial product.
The assessment is based on the vague distinction the regulator has made between the facts about financial products and how influencers may present them.
Australian Liberal Senator and proponent of standard crypto regulations Andrew Bragg also pointed at the lack of a clear distinction between the guidelines of ASIC and the regulation of crypto in the industry. Presently, crypto is not regulated as a financial product in Australia. According to him, the crypto industry should not be included in the new restrictions under the current laws.
“Crypto is currently unregulated and not a financial product… I believe we can do more,” he said, adding that the regulator’s current policy makes the law applicable to the crypt industry.
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