Hong Kong warns ICOs maybe possibly be classified as Securities

Hong Kong’s Securities and Futures commission has issued a new statement regarding ICOs and it’s classification in Hong Kong. The stated that depending on circumstances, some ICOs may be regarded as securities and could fall under securities regulation.

Where the digital tokens involved in an ICO fall under the definition of “securities”, dealing in or advising on such digital tokens, or managing or marketing a fund investing in them, may constitute a regulated activity. Parties engaging in a regulated activity targeting the Hong Kong public are required to be licensed by or registered with the SFC, irrespective of where they are located.

The take home here is that if a Hong Kong hosted ICO has securities like attributes it may be classified as a security and must be licensed by the SFC.

One country two systems

Hong Kong is part of China but has a different legal system under the “one country two systems policy”. This means Hong Kong has its own legislative council and will enforce laws differently from Mainland China. Currently, this policy is geared more toward regulation rather than outlawing ICOs like what is happening in Mainland China.

I’ve been involved in the Bitcoin and Blockchain space since 2012. Something I notice right away is that accurate factual information is hard to come by in this space. More often than not, we find extremely biased information that exploit the complexity of blockchain to obscure facts. The objective of this site is simple – to provide independent insights into the blockchain space.


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