Byte Power Under Pressure Of Red Tapism After Its Crypto Launch

  • Nov 15, 2018 AEDT
  • Team Kalkine
Byte Power Under Pressure Of Red Tapism After Its Crypto Launch

Byte Power Group Limited (ASX: BPG) is into another problem of getting its cryptocurrency exchange as well as the digital token which is delayed for a longer period of time. For this reason, it is trying to deal with the stringent rules of the corporate regulators. As per the corporate regulators of Byte, the token issued could be a source of regulated managed investment scheme. However, the company disagrees on this. They say that in order to raise money, the company is using a Byte token by selling “Byte Power X Loyalty Tokens”. 

The benefit of using these tokens can be enjoyed by the customers who will get a 40% discount on commissions of users of crypto exchange. However, the corporate regulator is against their views and says that the offers which they make do not constitute a financial product.

The regulator also clarified that just like we have IPO, there is a process called ICO (initial coin offer) which could be considered as a managed investment scheme if the people who are contributing their hard-earned money or asset (like digital currency) to gain interest in the scheme. These interests are being regulated by the Corporation Act. It also includes any contribution made collectively or used in a common firm in order to derive financial benefits. It also considers that the contributors have the voting rights.

As per the guidance note, if there is any effect seen in the pool of funds made through the contributors in digital token then it might be considered that ICO has met the requirements of the managed investment scheme.

In Australia, the issuer of ICO tries to be very careful to make sure that they do not fall into the purview of ASIC. They try to make sure that they operate in the regulated space.

At present, Byte is also surrounded by number of challenges. It is also making efforts so that it could also get into the cryptocurrency space. But as a result of misfortune, the company which was supposed to have prepared to the cryptocurrency for testing by the end of 2017 was suffering a back to back loss. The condition of the company is such that it has fallen from a highly ambitious advisory role to suspected theft of a large number of these digital tokens through the original website developer.

After multiple unanswered queries of the ASX, in the month of February, the company was referred to the corporate regulators for further investigations.

The company was even quizzed by the ASX. The company said that there was a legal opinion in the month of September where the tokens were not considered as a financial product but were disagreed by ASIC. The company also said that ASIC suggests that Byte needs to get the license for both tokens and the exchange once the tokens are found to be a managed investment scheme.

Byte has already sold around 15.6 million tokens worth $936,958. Also, the sales of Byte are suspended in Australia till the issue get resolved. At present, the trading of shares on ASX is in suspended status. The shares were flat today morning.


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