The Australian Securities and Investment Commission (ASIC) yesterday released guidelines for those looking to raise funding through an initial coin offering (ICO), with ASIC commissioner John Price warning consumers of the “highly speculative investments”.
An ICO is a method of fundraising conducted through the blockchain network, and can be utlised by cryptocurrency-based startups as an alternative to traditional forms of raises such as crowdfunding or venture capital investment.
Last month Perth-based startup Power Ledger raised $17 million through its pre-sale ICO, however founders like Tim Lea of blockchain startup Veredictum have expressed concerns over the “wild west” of unregulated ICOs in the space.
The guidelines outline that the legal status of ICOs; whether they will be subject to the general law and Australian Consumer Law, or whether they will be subject to the Corporations Act will be determined by how each specific ICO is structured and operated.
Equity crowdfunding regime comes into effect
The equity crowdfunding regime has come into effect today, allowing startups and small businesses to raise money through equity crowdfunding platforms.
At this stage, this new legislative regime applies to public unlisted companies. Legislation was introduced into the Federal Parliament earlier this month to extend the regime to include proprietary companies.
For startups wanting to raise funds via equity crowdfunding, ASIC has more information on its website.
NSW joins with Israel for R&D Innovation program
Startups in New South Wales will be able to access grants of up to $250,000 to support R&D projects involving partners in Israel, under a new innovation program announced earlier this week.
The ‘NSW-Israel R&D Tech Innovation Program’ will help foster global opportunities to commercialise and sell new products, while also building innovation links between the two regions, Minister for Innovation Matt Kean said in a statement.
“Israel is one of the world’s leading innovation powerhouses, and this new program will allow NSW and Israel to help businesses build global commercial capabilities,” he said.
NSW-based startups interested in applying for the program will need to find an Israeli company to partner with before applications close on December 18.
The NSW state government will contribute 50% of the company’s project costs, with applicants then required to match that contribution. Israeli companies participating in the program will also be provided with matching grants from the Israel Innovation Authority.