Corporate cop ASIC fines crypto wannabe Byte Power $33k
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ASIC has fined cryptocurrency wannabe Byte Power Group $33,000 for breaking continuous disclosure laws.
ASIC issued an infringement notice on Wednesday after deciding Byte Power Group (ASX:BPG) broke the Corporations Act by not keeping the market fully informed over December 2017 and January 2018.
The company says it has “vigorously resisted” the allegations and stressed that if the directors decide to comply with the notice, it won’t be an admission of liability.
Paying that fine could be difficult for the company: at the end of September it only had $18,000 left in the bank.
The kind of breach ASIC is alleging carries a maximum penalty for a company of up to $110,000 for a criminal offence and a civil penalty of up to $1m.
Byte Power has been contacted for comment.
The background: missing tokens and unsatisfactory answers
Byte Power switched into the blockchain and crypto sector in 2017, when it said it intended to build a cryptocurrency exchange.
In early January, Byte revealed that $6.7m worth of SOAR tokens, a cryptocurrency, were missing from the company’s and chief Alvin Phua’s digital wallet.
The company cited “allegations” and “unauthorised dealing by [Singaporean software developer] Soar Labs with property rightfully belonging to Byte Power”.
It later took the developer to court and settled.
But the ASX queried the sequence of events with Byte Power early on and come February, referred the company to ASIC for failing to adequately respond to its queries.
Among other things, the ASX had questioned the due diligence involved in the appointment of initial developer Soar Labs, followed by the prompt appointment of Noetic less than a week after Soar Labs allegedly took off with BPG’s tokens.
The ASX called out Noetic’s website as “naive” for an advanced technology solution provider, and asked for clarification that it could deliver Byte Power’s proposed cryptocurrency exchange.
ASIC later also questioned whether Byte’s token launch might constitute a financial product.