Share this article
Hong Kong Regulator Warns ICO Tokens May Be Securities
The Hong Kong securities regulator, the SFC, has announced that tokens issued via initial coin offerings may be classified as securities.
Updated Sep 13, 2021, 6:53 a.m. Published Sep 5, 2017, 12:00 p.m.
Make us preferred on Google
Hong Kong financial regulator, the Securities and Futures Commission (SFC), has announced that tokens issued via initial coin offerings, or ICOs, may be classified as securities.
In the statement, Julia Leung, the regulator's executive director of intermediaries, explained that the SFC is "concerned about an increase in the use of ICOs to raise funds in Hong Kong and elsewhere."
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
She warned that those involved in an ICO "need to be aware that some ICO structures may be subject to Hong Kong securities laws.”
Further, the classification may extend beyond ICOs into digital asset exchanges dealing in the tokens, according to the SFC, which states:
"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 statement just a day after an official announcement from financial authorities in China classified ICOs as illegal and demanded the refund of related investments to customers.
Regulators elsewhere have also recently started to warn on the status of ICOs as securities.
Last month, the U.S. Securities and Exchange Commission stated that the offering and sale of digital tokens may be "subject to the requirements of the federal securities law." Canada regulators have also followed suite, saying that in "many cases ... the coins/tokens should properly be considered securities."
Hong Kong stock exchange image by Shutterstock
More For You
Small investors are buying bitcoin. For a rally to succeed, the whales need to join in.
Small wallets have increased their BTC holdings by 2.5% since October's all-time high while large holders trimmed 0.8%, Santiment data shows.
What to know:
- Bitcoin wallets holding less than 0.1 BTC have increased their share of supply to the highest since mid-2024 even as the price holds around the mid-$60,000s.
- Larger holders with 10 to 10,000 bitcoins — the whales and sharks that typically drive major moves — have reduced their positions since the October peak.
- The divergence supports choppy, fragile price action because retail demand alone cannot sustain rallies when big wallets are distributing into every recovery.
Top Stories
