According to an official statement, digital tokens provided in initial coin offerings (ICOs) in Hong Kong may now be regulated like other securities.
According to an official statement, digital tokens provided in initial coin offerings (ICOs) in Hong Kong may now be regulated like other securities. The statement was made by the chief regulator of Hong Kong’s financial institution – the Securities and Futures Commission.
This statement comes after the SFC’s observation of rising usage of ICOs in Hong Kong and other places. Additional statements expressing the same concerns have been made by Julia Leung, the executive director of SFC. The executive director made it clear that it was necessary for affected stakeholders in ICOs to understand the bearing that the securities laws could have on particular ICO protocols.
A snippet from the said statement read:
While the norm is to treat digital tokens provided in ICOs as virtual commodities, it has been noted with concern that particular ICOs are increasingly adopting features and terms that liken them to securities.
It is from this background that the SFC added that future stakeholders and users of such ICOs might need to acquire registration before doing any operations regardless of their location. The affected parties include those carrying out transactions, those marketing and advising on them and even parties who make any sorts of investments in the ICOs.
This statement from Hong Kong is barely a day away from Chinas full ban on every ICO, a ban that the Chinese central bank sought to implement by directing a reimbursement of ICO-related investments to clients.
Away from Hong Kong, investors in ICOs in Singapore have been encouraged by the central bank of Singapore to be aware of the risks involved in the trade of the same. This is according to an official advisory made to consumers in that country last month. In June, the SEC of the United States suggested regulation of digital token sales. Last week, a public warning was made by the SEC regarding some companies that were exploiting their stock prices by use of ICOs.