The Australian Securities and Investment Commission has prohibited Bitcoin Group Limited from publishing any statements about a potential IPO on the Australian Security Exchange (ASX) after the company used WeChat to spread the news.

 

The regulator explains its position in a press release on its main webpage. According to the release, the Melbourne-based company used WeChat to advertise the possible IPO before lodging the necessary documents with the Australian authorities.

WeChat is a communication service popular among Chinese users that provides voice and text message functionality and allows users to create messaging groups and chatrooms. According to Statista, the company had around 460 million users in the third quarter of 2014. The Australian commission found that the advertisement campaign on WeChat went against disclosure requirements and banned the company from publishing any information about a future IPO:

“ASIC has placed a stop order prohibiting Bitcoin Group Limited (a proposed Bitcoin ‘miner’ in Australia) from publishing any statements concerning its intention to make an initial public offering of its shares until the lodgement of a prospectus” 

Commissioner John Price said:

“The regulator will often review pre-prospectus advertising or publicity to ensure legal requirements are being met. This is because any statements made about a potential offer may influence the investment decisions of consumers who will not have the benefit of all material information that would be included in a prospectus”

 The Australian commission also stated that Bitcoin Group’s pre-IPO advertising targeted “potential investors from the Chinese community”. 

The regulator stressed that the measure only applied to the one company and not the Australian bitcoin community in general. 

The group itself did not provide any public response to the press-release. Its website does not appear to be regularly updated: most materials date back to 2014. 

Its latest update about the possible IPO notes that the company plans to raise $20 million on the stock market. According to the plan, after the IPO the company “will morph into a consolidated payment network”. It is worth noting that the Bitcoin Group website has both an English and a Chinese version.  

If the IPO is successful, Bitcoin Group will be the second Bitcoin company listed on ATX after DigitalBTC, a payment processor. In March 2015, a representative of DigitalBTC will participate in the Australian Security Exchange’s presentation in New York.