- The Australia Securities Investments Commission (ASIC) has stopped an ICO by Global Tech Exchange, a Brisbane-based firm
- The ICO had planned to raise between $10 million and $50 million for a cryptocurrency exchange
- The ASIC has shut down at least 5 ICOs in the last six months
Global Tech Exchange, a Brisbane-based firm had been planning to launch an ICO. The ICO had aimed to raise up to $50 million but it has now been cancelled after the Australia Securities Investments Commission (ASIC) stepped in.
According to reports, Global Tech Exchange had planned to use the funds raised, between $10 million and $50 million to launch a new cryptocurrency exchange.
The ICO was intended to run from the 12th of September 2018 till the 10th of December 2018.
In accordance with ASIC guidelines, investors have had their funds refunded and the company voluntarily applied to be de-registered with the agency on the 19th of October 2018.
Celebrity endorsement drummed up hype
Even before the raising of capital began, the ICO had already drummed up a lot of hype and anticipation.
This was majorly due to its association with cricket player Michael Clarke who had endorsed the project with a tweet.
Since the news of the cancellation broke, Clarke has distanced himself from the project, with the company stating, “Michael Clarke is no longer associated with Global Tech Exchange.”
Not the first ICO shot down
This isn’t the only incident in recent times where the ASIC has stopped an impending ICO.
According to the ASIC themselves, they have halted at least 5 ICOs in the last six months.
“You should not simply assume that using an ICO structure allows you to ignore key protections there for the investing public and you should always ensure disclosure about your offer is complete and accurate,” said Commissioner John Price earlier this year.
A common reason for the stopping of these ICOs is their failure to comply with ASIC regulations. Some were also halted in order to restructure to better comply with existing legal requirements.
ICOs have become more commonplace in the last two years and this has created the need for more defined laws to govern them.
The cancellation of ICOs due to non-compliance with ASIC regulations shows that there is still work to be done.
On the other hand, the benefit with regulations is that ICOs will become more organized and structured, rather than ‘crack shot’ ventures.