Mills Oakley recently provided a submission to the Australian Securities and Investments Commission (ASIC) in response to Consultation Paper 325: Product design and distribution obligations. In the ever evolving area of blockchain and digital assets, especially in decentralised finance (DeFi), we welcome the opportunity to partake in ASIC’s consultation around appropriate financial product design and distribution.

Our submission:

• provides some examples of DeFi, particularly the insurance offered by Nexus Mutual and the margin lending like offering my Maker DAO; and
• sets out some additional matters specific to the design and distribution of DeFi products that would benefit from ASIC guidance.

DeFi is lowering the barriers to entry and democratising access to more sophisticated financial products. In the absence of smart contract norms or minimum standards around the automatic or manual resolution of disputes or issues arising from consumer participation in DeFi (and especially where DeFi communities have adopted non-traditional governance and remedial responses such as hard forks), we believe ASIC can play a meaningful role in articulating how product design and distribution obligations can be administered in the DeFi sector.

We look forward to discussing our submission and lending assistance to ASIC as the consultation progresses.

Please get in contact with Joni Pirovich on +61 450 958 749 or [email protected] to discuss your experience and insights regarding DeFi or to discuss your blockchain, smart contracts and digital asset requirements.

For further information about our recent experience with Blockchain, Digital Assets & Smart Contracts, see our Capability Statement.