Aussie Crypto ‘Finfluencers’ Face Severe New Legal Restrictions

New warnings from the Australian Securities and Investments Commission (ASIC) about appropriate behavior for financial influencers could have a dramatic impact on the local crypto industry.

ASIC’s Recent Fact Sheet contours the pitfalls that influencers and the companies that hire them can fall into when they consciously or unconsciously promote financial products. The penalties for failing to heed ASIC’s warnings could result in millions of dollars in fines for companies and up to five years in prison for individuals.

While crypto influencers are not specifically named, the guidelines certainly apply to them as cryptocurrency investment services are seen as financial products. To those financial influencers or ‘finfluencers’ who aren’t sure if their brand violates the law, ASIC writes, “Think carefully about your content and whether you’re providing unlicensed financial services.”

One point of confusion in the new rules concerns exactly what promotion is rather than innocently informing financial products. financial blogger of Strong Money Dave Gow wrote on March 29 that “Writing almost anything can influence someone to invest or use a financial product.”

Gow’s assessment is based on the somewhat vague distinction ASIC has made between objective facts about a financial product and the way influencers can present it. There stands that:

“If you present factual information in a way that conveys a recommendation that someone should or should not invest in that product or class of products, you could be breaking the law by providing unlicensed financial product advice.”

Australian Liberal Senator Andrew Bragg believes there is a mismatch between the new ASIC guidelines and how crypto is regulated in his country. He believes that the crypto industry should be exempted from these new restrictions under current legislation. He told Coin-Crypto in an email:

“ASIC’s current policy applies the law to crypto to the extent that digital assets fall under the definition of a financial product. Crypto is currently unregulated and not a financial product… I believe we can do more.”

Senator Bragg is a proponent of clearer crypto regulation and recently introduced an ambitious new proposal regarding decentralized autonomous organizations (DAO) during Australia Blockchain Week last month.

As someone who can now be considered an unrecognized influencer, Gow takes an exception to restrictions on what they are not allowed to do now, which is make a recommendation. He added that the rule restricts influencers to simply “parroting what you can read elsewhere” and hurts investors’ knowledge base. He stated, “How does that help you wade through the sea of ​​information and nonsense?”

Related: SBF Opens Aussie Blockchain Week Because Government Says We’re ‘Open For Business’

As part of the Australian Corporations Act, individual influencers must be careful about how they promote financial products, while companies must also keep a close eye on their hired influencers to ensure no rules are being broken. The committee provides several case studies that provide context that can help determine whether an individual or company is promoting financial services.

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