ASX-listed crypto exchange smacked over disclosure fail

ASX-listed crypto exchange smacked over disclosure failASIC seeks alpha, finds vapour.

Moribund ASX-listed cryptocurrency exchange operator Byte Power Group has officially coughed-up $33,000 in fines issued by Australia's financial watchdog for failing to inform the market operator and shareholders of changes to the bitcoin exchange's development last year.

The Bisbane-based company, which has been suspended from trading since December 2017, was slapped with the infringement notice in December 2018 following its referral to the Australian Securities and Investments Commission (ASIC) by the ASX.

The action is the latest in efforts to disuade junk fintech and coin raisings from hanging around on the equities board.

The referral concerned a BPG announcement two months earlier that stated the development of software behind its cryptocurrency exchange - which has since opened for registrations - was well advanced.

BPG had also said its partner on the project, Singapore-based blockchain and fintech company Soar Labs, was due to start alpha testing before the end of 2018.

Not everyone, including regulators, were convinced.

ASIC reckons the exchange was not ready for testing at the time of the announcement, and that BPG had approached a different software provider for the cryptocurrency exchange almost a year earlier.

ASIC alleged that by 14 December 2017, Byte Power was aware that it had approached alternative cryptocurrency exchange software providers and that Soar Labs had not carried out any work on the development of Byte Powers cryptocurrency exchange, the securities watchdog said.

No testing of any software had started or was ready to be started.

ASIC said that by failing to inform the market of this development (or lack thereof) BPG was in breach of its continuous disclosure obligations.

The regulator has also fettered BGP's can rattling rights.

In addition to the penalty, ASIC made a determination which places certain restrictions on Byte Powers ability to raise capital without full disclosure using a full-form prospectus until 12 December 2019.

ASIC said BPG had complied with the infringement notices and the penalty was paid on 5 February 2019.

But there's still life in the company yet, according to its management.

In another statement to the ASX, BPGs company secretary Michael Wee said the companys compliance with ASICs infringement notice was not an admission of liability, and that it cannot be regarded a contravention of the Corporations Act.

Last month ASX said it was still concerned about the operation of the cryptocurrency exchange, including its disclosure around the development, as well as the legal status of BPX loyalty tokens.

The ASX said the suspension would continue until the ASIC investigation was complete and it was satisfied the shares were fit to be reinstated.

Read full story on iTnews

Tags: Australian Securities Exchange, Moribund Records, Australia, Australian Securities and Investments Commission