The Australian Securities and Investment Commission (ASIC) recently barred Bitcoin Group Limited from making public statements about its initial public offering.
The news hit the glare when the aforementioned Melbourne-based Bitcoin mining startup was found to have sought investment from Chinese investors while citing ‘half-baked’ plans to get listed on Australian Stock Exchange. According to the ASIC, the company was publicizing its IPO even before complying with the existing obligations.
“The publications were made before Bitcoin Group was registered as an Australian company by ASIC and before the lodgment of a formal disclosure document,” the Australian regulator John Price said in a statement. It further reminded companies to avoid indulging in an sort of advertising or publicity until and unless they have a proper regulated disclosure document issued by them [the ASIC].
“This,” he added, “is because any statements made about a potential offer may influence decisions of consumers who will not have the benefit of all material information that would be included in a prospectus.”
ASIC Regulations for Bitcoin Mining Companies
In December last year, the ASIC has thoroughly explained how it wants Bitcoin-related financial services businesses (involving fiat currencies) to obtain a license. They include payment processing companies, fiat-based Bitcoin exchanges, etc. Bitcoin Group Limited, which will clearly be selling Bitcoin mining equipments in exchange of fiat money, however cannot be called a financial service. The company, in strict words, is an issuer of services and therefore needs to provide disclosure documents to customers and investors. Excerpt from the ASIC submission last year:
“Miners who acquire new units of bitcoin with the purpose of selling or transferring it, and who do so within one year of acquiring the bitcoin, may be required to prepare and provide a PDS to the person to whom they sell the bitcoin. In this case, the miners would be responsible at law for the content of the PDSs they distribute.”