Hong Kong’s securities regulator is having a skeptical tone on initial coin choices (ICOs).
In a speech at an financial investment market function on Friday, Julia Leung, deputy head of the Hong Kong Securities and Futures Commission (SFC), at the time more cautioned the community around fundraising actions associated with the technological know-how.
“While we accept that progressive technologies this kind of as blockchain have the possible to boost effectiveness and economic inclusion, that does not entitle any person to conduct fundraising from the community in violation of securities regulation,” Leung mentioned.
She more lifted worries that, though disguised as blockchain technological know-how, quite a few ICO initiatives may possibly not be genuinely presenting technological innovation and pose risks for investors.
“Further complicating issues, quite a few of these fundraising (actions) are doubtful, if not downright frauds. The issuers escape the scrutiny of the law enforcement or securities regulators for the reason that of their cross-border mother nature and the way the crypto assets are structured to fall outside any regulator’s perimeter.”
The responses appear just months just after the agency halted an ICO task around worries it was presenting unregistered securities in Hong Kong. Beforehand, the SFC has purchased various exchanges to delist tokens derived from ICOs that were being also regarded by the agency as securities.
As element of its initiatives around the technological know-how, the SFC is also shifting to educate the community about the perceived risks of investments in cryptocurrencies.
In January, the SFC and one more agency introduced a media campaignacross the city’s subway program in an effort to dampen the developing buzz around ICO investments.
In Friday’s speech, Leung attributed the attractiveness of this kind of investments to a gambling mindset, indicating: “Many millennials who subscribe to electronic tokens in ICOs recognize that there is no intrinsic price in the tokens but are betting on the immediate rise of the token price in the secondary market place.”
Leung image courtesy of the SFC