Unlike mainland China regulators, the Hong Kong SFC, the Commission did not rashly deny and ICO.
The growth in the number of startups that raises funds through the mechanism of the ICO continues to attract the attention of regulatory bodies around the world. Today, the Commission on securities and futures in Hong Kong (SFC) issued a statement about the rules that may be applicable to the initial placement of tokens.
SFC notes that the number of tokens held by the ICO can be regarded as securities and therefore subject to the securities laws of Hong Kong.
Regulators have warned that if the tokens involved in the ICO fall under the definition of "securities", the treatment or the provision of tokens such as the management or marketing of an investment Fund constitute a regulated activity. The parties involved in regulated activities, focused on the population of Hong Kong must be licensed or registered by the SFC, regardless of the place of its location.
"We are concerned about the increased use of the ICO to raise funds in Hong Kong and other places," said SFC Executive Director Julia Leung. "Those who participate in the ICO should be aware that some of the structure of ICO subject to the securities laws of Hong Kong".
It is important to note that, unlike the regulators in mainland China, who yesterday released a complete ban on ICO, the SFC has adopted a more Western approach, requiring state accreditation of those tokens that fall under the category of securities.
This is the most well-known approach, in particular, American and canadian regulators with respect to ICO.