The Australian Securities and Investments Commission (ASIC) expects cryptocurrency marketing campaigns to say what they mean and mean what they say. The regulator has come down hard on a fintech firm for certain representations about its crypto offerings.
Bobbob Ltd. must pay a penalty of AU$53,280, or about $33,300 in US dollars, one of the heftiest fines for a crypto-related violation in Australia in months.
ASIC Cracks Down on Crypto Fraud
ASIC’s announcement of the penalty charges that Bobbob, under its sole director, Byron Goldberg, marketed a crypto-based investment product for eight months beginning in April 2022.
Over this period, some 700 customers head the siren song of this investment opportunity. And, in total, they deposited about AU$1.6 million into the fund.
In ASIC’s view, the marketing of the product fell short of its standards in a number of ways. Certain representations from Goldberg and Bobbob fostered the impression that the product had ASIC approval. They also led customers to believe that an investment in the product worked basically like a bank account.
In addition, Bobbob was not forthcoming about either the product’s risk profile or its probable returns, ASIC claims. Hence customers thought they could expect 7.6% interest per year. A figure that in no way reflected the actual returns.
Besides the fine, ASIC has decreed that neither Goldberg nor Bobbob may offer financial services to retail customers for one year.
ASIC Signals a More Aggressive Stance on Fraud
The news of the penalty and temporary injunction against Bobbob and Goldberg will not surprise anyone who has followed ASIC’s recent public statements.
On August 28, the regulator issued a harsh warning about its aim to crack down on “digitally enabled misconduct.”
ASIC director Joe Longo described moderate progress toward the realization of strategic priorities put in place in 2022. And pointed to a number of factors that he doesn’t believe make ASIC’s job easier.
“We are responding to key trends and emerging issues in the regulatory landscape, where there are major shifts across sustainable finance, the digital and data economy, and an aging population,” Longo said.
ASIC’s Crackdown on Binance
Longo’s warning came on the heels of aggressive moves against Binance and other crypto players. After months of tension between the troubled exchange and regulators in Australia and other countries, ASIC took bold action. Leaving no question as to its view of the legitimacy of Binance and crypto trading writ large.
On June 4, ASIC carried out searches at Binance’s Australian offices. A Bloomberg report stated that the search was part of a probe into derivatives offerings. And that it targeted not one but “several Binance Australia locations.”
Learn more about the Australian government’s stance on crypto exchanges in general and its approach toward Binance.
Prior to the raids, Binance had come to the decision to close local derivatives exchanges and cease Australian dollar bank transfers.
At least the regulator and Binance both saw which way the wind was blowing. In April, ASIC voided Binance Australia’s derivatives license, reportedly in response to a request from Binance itself.
Top crypto platforms in the US | December 2023
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