Today, the Securities and Futures Commission of Hong Kong published its annual report for 2017-2018, in which it offered some insights into its new policy on ICOs and cryptocurrencies.
“New technologies provide convenience for investors but come with risks. We keep a close watch on cryptocurrencies and initial coin offerings, intervening where appropriate. We also launched the SFC regulatory sandbox for qualified firms to conduct regulated activities utilizing financial technologies,” the organization wrote.
From the tone of the report, it appears that the SFC only wants to ensure that investors do not encounter risks related to scams and cyber attacks that could cripple exchanges. The regulator added that it would “remain vigilant in policing the market” and look at how it develops over time.
Considering Hong Kong’s history as a hyper-liberal city, we do not expect it to take any harsh measures against the concept of cryptocurrency or ICOs. This isn’t a guarantee, though, as South Korea—another “liberal tiger” in the Asia-Pacific region—put a full stop to ICOs just as its local ICO market began to find its footing.
The report, on page 8, has a small footnote reminding businesses and operators that cryptocurrencies are defined by the city-state as securities and therefore fall under the jurisdiction of securities laws in Hong Kong.
We also find out that the SFC took regulatory action against a number of exchanges in February this year due to insufficiencies in their cybersecurity practices. As we read the report further, the organization’s words seem like a veiled warning that there may be some regulation of ICOs in the future. However, there is nothing indicating that the fundraising practice would ever be banned.
A study by the Wall Street Journal published last month found that up to a fifth of ICOs are possible scams, after finding fake teams and plagiarized whitepapers. Protecting would-be investors who are just getting into the market from these scams may indeed require some regulation.
This article appeared first on Cryptovest
