Securities and Futures Commission (SFC) reported that tokens issued in the framework of the initial coin offers can be classified as securities.
According to regulator’s executive director of intermediaries Julia Leung, Securities and Futures Commission is “concerned about an increase in the use of ICOs to raise funds in Hong Kong and elsewhere.” Also, the representative of the regulator warned that activities of some of the ICO structures may covered by the securities Act of Hong Kong.
Moreover, this classification can extend beyond the ICO and affect exchanges of digital assets that trade such tokens.
Parties engaging in the secondary trading of such tokens (e.g. on cryptocurrency exchanges) may also be subject to the SFC’s licensing and conduct requirements, – the SFC said in a statement.
Recall, in Hong Kong based a number of well-known cryptocurrency exchanges, such as Bitfinex and Gatecoin. Bitfinex is in the process of creating another platform that will specialize in trading tokens of the ERC20 standard now.
Earlier the similar statements have made by the financial regulators of the US, Canada and Singapore, while China went a little further, simply banning the ICO.
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