SYDNEY (Reuters) - Australia's corporate watchdog said on Thursday it was stepping up scrutiny on "misleading" initial coin offerings (ICOs)targeted at retail investors while adding it has already acted against several such proposals.

The Australian Securities & Investments Commission (ASIC) said consistent problems with proposed ICOs included the use of "misleading or deceptive" statements in sales and marketing materials and not holding Australian financial services licenses.

ICOs, or the selling of digital coins or tokens, are increasingly popular with start-ups as a way to finance projects. The ICO market is relatively small in Australia but ASIC is concerned poor conduct could have a negative impact on investor confidence.

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"If you raise money from the public, you have important legal obligations," ASIC Commissioner John Price said in a statement.

"It is the legal substance of your offer - not what it is called - that matters," Price said, adding some proposed ICOs operated illegal, unregistered investment schemes.

Since April 2018, ASIC has prevented five ICOs from raising capital. These ICOs have been put on hold and some will be restructured to comply with legal requirements, ASIC said.

The regulator is taking action against one completed ICO, it said without identifying the company.

"ICOs are highly speculative investments that are mostly unregulated, and while there are genuine businesses using this structure many have turned out to be scams," ASIC noted.

Earlier this year, Moscow-based cyber security firm Group IB found projects which raise funds through ICOs were attacked by cyber criminals 100 times a month on average, underscoring the risks of investment in cryptocurrency ventures online.

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Globally, start-up firms have raised millions of dollars online to fund projects, with often little more than a handful of employees and an outline business plan attracting regulatory attention.

(Reporting by Swati Pandey; Edtiting by Sam Holmes)