Crypto Prices Mixed as ASIC Steps Up Scrutiny on “Misleading” ICOs

20 September 2018, 18: 02
Cryptocurrency prices were mixed on Thursday

Cryptocurrency prices were mixed on Thursday as the Australian Securities & Investments Commission (ASIC) said in a statement that it is stepping up scrutiny on “misleading” initial coin offerings (ICOs).

Bitcoin traded 0.7% higher to $6,400 at 11:39PM ET (03:39 GMT) on the Bitifinex exchange.  

Ethereum fell 1.6% to $210.41 in the previous 24 hours.

XRP slid 2.7% to $0.32421 on the Poloniex exchange, while Litecoin also lost 1.6% at $53.813.  

The ASIC warned there has been “consistent problems” with proposed ICOs as they often abuse the use of misleading and deceptive statements in sales and marketing materials. Some of the companies involved in ICO activities do not hold Australian financial services licenses, the regulator noted, adding that it has already taken action against several such proposals.

"If you raise money from the public, you have important legal obligations," ASIC Commissioner John Price said in the statement.

"It is the legal substance of your offer - not what it is called - that matters," he added.

"ICOs are highly speculative investments that are mostly unregulated, and while there are genuine businesses using this structure many have turned out to be scams," ASIC noted.

In other news, Cointelegraph reported on Wednesday that hackers have stolen $59 million worth of virtual coins from Japanese crypto exchange Zaif.

Citing Japanese media, the report noted hackers stole 4.5 billion yen from users’ hot wallets and 2.2 billion yen from the assets of the company.

Meanwhile, in the U.S., the New York State Attorney General’s office said the digital currency market is vulnerable to manipulation.

Virtual coin exchanges are vulnerable to market manipulation and lack consumer protections, according to a report by the New York State Attorney General's office.

The 32-page report alleges that exchanges are not doing much to protect investors, according to the report.

"The industry has yet to implement serious market surveillance capacities, akin to those of traditional trading venues, to detect and punish suspicious trading activity," the report stated.