Talking at an investment industry function, the deputy head of the Hong Kong Securities and Futures Commission (SFC), Julia Leung, delivered a stark warning, advising the public against certain fundraising activities, namely ICOS..
Acknowledging that blockchain and its ilk had the potential to increase efficiency and promote financial inclusion, she nonetheless cautioned that this did not entitle individuals to carry out ICOs that violate securities law.
She further warned that many ICO projects may simply be disguised as blockchain technology, whilst offering no real technological innovation and posing significant risks to investors.
Explaining these comments, Ms Leung said:
“Further complicating matters, many of these fundraising [activities] are dubious, if not downright frauds. The issuers escape the scrutiny of the police or securities regulators because of their cross-border nature and the way the crypto assets are structured to fall outside any regulator’s permit.”
This statement comes in the wake of scrutiny by the SFC of a particular ICO project, which the agency was forced to halt following worries over its offering of unregistered securities in Hong Kong.
It has also had to step in with regards to several other exchanges in earlier incidents of a similar nature, forcing the delisting of numerous ICOs which the agency believed were more accurately classified as securities.
This has led the SFC to implement a campaign intended to better educate the public about the technology, with their primary focus being to make people aware of the risks associated when investing in cryptocurrencies.
As part of this drive, a media-focused campaign was launched in January. Concentrating its efforts on the region’s subway system, the SFC said that it will cool the ever-increasing hype surrounding such investments.