A new set of warnings from the Australian Securities and Investments Commission (ASIC) about how financial influencers should act could have a big impact on the local crypto industry.
Influencers and the companies that hire them could fall into some of these traps while promoting financial products, according to ASIC’s most recent Information Sheet, which you can read here.
People who don’t listen to ASIC’s advice could be fined millions of dollars and go to prison for up to five years if they don’t.
It doesn’t say specifically about crypto influencers, but the rules still apply to them because cryptocurrency investing services are seen as financial products.
Those “finfluencers” who aren’t sure if their brand is breaking the law, ASIC says, “Think about your content and whether you are providing unlicensed financial services.”
There is a lot of confusion in the new rules about what constitutes promotion and what is just information about financial products.
She is a financial blogger for Strong Money.
When Dave Gow wrote about this on March 29, he said that “Writing about almost anything could make someone want to invest or use any financial product.”
Because ASIC made a very vague distinction between objective facts about a financial product and how influencers might choose to present them, Gow thinks that ASIC has made a mistake.
“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 breach the law by providing unlicensed financial product advice.”
New ASIC guidelines don’t match how crypto is regulated in Andrew Bragg’s home country, he thinks.
He thinks that under current law, the crypto industry should not have to follow these new rules.
In an email, he said:
“ASIC’s current policy applies the law to crypto to the extent that digital assets fall within 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 big supporter of clearer crypto regulations, and he recently came up with a big plan for decentralized autonomous organizations (DAOs) at Australia Blockchain Week last month.
As someone who may now be an unlicensed finfluencer, Gow doesn’t like the new rules that say they can’t make any kind of recommendation.
He said that the rule makes it hard for influencers to just “repeat what you can read somewhere else,” which hurts investors’ knowledge.
When he said that, “How does that help you get through all the information and crap out there?
Modify old content / minimise investing discussion / not mention any financial products, funds etc.
Some may choose to close up shop, I know one who is, while others will prob continue for enjoyment in a limited capacity.
Sad situation for free speech.
— Dave Gow | Strong Money Australia (@strongmoneyaus) April 2, 2022
When it comes to Australia’s Corporations Act, individual influencers have to be careful about how they promote financial products. Corporations, on the other hand, have to keep an eye on their hired influencers to make sure no rules are broken.
The commission has a lot of case studies that could help people figure out if someone or a company is trying to sell financial services.