Byte Power pays $33,000 for alleged breach of disclosure obligations

ASX-listed company, Byte Power Group Limited (Byte Power), has paid a penalty of $33,000 after ASIC issued an infringement notice for an alleged failure to comply with Byte Power’s continuous disclosure obligations.

Byte Power, a diversified technology, food and wine distribution company, made an announcement to the Australian Securities Exchange (ASX) on 27 October 2017 titled “BPG Cryptocurrency Exchange Update” which included a statement that its Singapore-based partner for the development of a cryptocurrency exchange, Soar Labs Pte Ltd (Soar Labs), “is well advanced in the software development and expects to be Alpha testing the system robustness before the end of the year.”

ASIC alleges 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 Power’s cryptocurrency exchange. No testing of any software had started or was ready to be started.

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ASIC alleges that by failing to inform the ASX that the software development for its proposed cryptocurrency exchange was not advanced and testing of the system software was not going to be undertaken by the end of the year, Byte Power was in breach of its continuous disclosure obligations.

ASIC issued Byte Power with an infringement notice and Byte Power has complied with the infringement notice. The penalty was paid on 5 February 2019.

ASIC also made a determination which places certain restrictions on Byte Power’s ability to raise capital without full disclosure using a full-form prospectus. This will be in place until 12 December 2019.

ASIC’s action follows a referral from the ASX.

Background

Section 674(2) of the Corporations Act and ASX Listing Rule 3.1 details listed companies’ continuous disclosure obligations.

Section 713 of the Corporations Act details the requirements for a short form propectus.

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The Corporations Act provides that compliance with infringement notices is not an admission of guilt or liability.

Byte Power is not, by reason of its compliance with the notice, regarded as having contravened section 674(2) of the Corporations Act.

Details of the infringement notice will be published in the ASIC Gazette.

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