September 5 2017
The Securities and Futures Commission (SFC) today issued a statement on existing regulations which could be applicable to initial coin offerings (ICOs).
ICOs typically involve the issuance of digital tokens, created and disseminated using distributed ledger or blockchain technology. Whilst digital tokens offered in typical ICOs are usually characterised as a “virtual commodity”, the SFC has observed that certain ICOs have terms and features that may mean that the digital tokens are “securities”.
The SFC urges investors to be mindful of potential scams as well as the investment risks involved in ICOs. As ICOs operate online and may not have a presence in Hong Kong, investors may be exposed to heightened risks of fraud.