Australian Securities Exchange Probes Conglomerate’s Upcoming ICO For Crypto Exchange

A Queensland-based investment company has come under the Australian Securities Exchange’s (ASX) radar after seeking over $15 million in an initial coin offering (ICO) for a cryptocurrency exchange.

A Suspicious Expansion

Earlier this year, Byte Power Group (BPG), a conglomerate with interests in food and beverage, energy and cryptocurrencies, was issued a detailed questionnaire to explain its core business activities after the ASX raised concerns regarding the firm’s upcoming token issuance.

At the time, a release confirmed BPG’s intention to offer over 1 billion BPX tokens to private investors at 6 cents each, representing 25 percent of its total market supply. Meanwhile, 75 percent of the tokens were reserved for marketing, user rewards and “pre-opening” funding.

The conglomerate intended to launch a cryptocurrency exchange using the raised funds, with the BPX tokens in place to offset transaction fees and to be used as a trading pair. However, the ASX was unimpressed.

Legality Questioned

In August, a total of 17 questions were posed to BPG regarding its business practice and decision to hold an ICO, given the company is listed on the ASX and such financial developments could lead to increased equity prices.

The ASX further questioned if the development complied with the bourse’s strict listing rules. It was also the first instance of a publicly traded firm raising additional capital via alternative methods.

As it stands, on Sept. 5, BPG confirmed the sale of BPX tokens to investors in Singapore and Australia, with further plans to target Hong Kong investors.

It remains unclear what percentage of the remaining tokens are reserved for retail investors.

‘Not a Financial Product’

Despite the crackdown, the BPG has maintained its clear stance on the ICO, stating legal advice was duly sought in the jurisdictions where the BPX token was offered.

Furthermore, the BPG claimed that the tokens do not meet the definition of a financial product under the Corporations Act of Australian Law guidelines.

The Australian Securities and Investments Commision stated last year, however, that all ICO products fall under the category of a financial product, as per guidelines laid out in September 2017. The release at the time stated:

“If the value of the digital coins acquired is affected by the pooling of funds from contributors or use of those funds under the arrangement then the ICO is likely to fall within the requirements relating to [managed investment schemes].”

The post Australian Securities Exchange Probes Conglomerate’s Upcoming ICO For Crypto Exchange appeared first on CryptoSlate.

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