Hong Kong’s regulatory authority warns that ICO tokens could be securities

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The Hong Kong Monetary Regulatory Authority, the Securities and Futures Commission (SFC), has established that tokens issued as an initial offer of coins or ICOs may be labelled as securities.

In Julia Leung’s statement, executive director of the regulator with regard to intermediaries, explained that SFC is “concerned about an increase in the use of ICOs to raise funds in Hong Kong and elsewhere.

He warned that all those involved in an ICO “should be aware that some ICO facilities may be subject to the laws of Hong Kong Securities”.

In addition, the regulation could be extended directly to trade in digital goods forming part of tokens under the SFC, which reads as follows:
Parties involved in the additional sale of such tokens may also be at risk of being subject to the licensing and conduct requirements of the SFC.

Regulatory authorities in other countries have also recently started to notify the status of ICOs.

Last month, the US Securities plus Exchange Commission stated that the offer and purchase of digital tokens could be “subject to the requirements of federal securities regulation”. Canadian regulators have also followed the suite, saying that “in many cases coins / tokens must be considered securities”.

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