Hong Kong Securities Watchdog Skeptical On Initial Coin Offerings
The Hong Kong Securities and Futures Commission has repeated its concerns over the use of Initial Coin Offerings or ICOs to raise funds.
Julia Leung, deputy chief executive officer of Hong Kong SFC, was speaking about New Technologies and Asset Management at a luncheon event hosted by the Hong Kong Investment Funds Association.
Leung, who is also the Chair of a Fintech Advisory Group, made it clear that while acknowledging that innovative technologies such as blockchain have the potential to improve efficiency and financial inclusion, that does not entitle anyone to conduct fundraising from the public in violation of securities law.
The high volatility of crypto assets and serious hacking incidents in Japan and South Korea in recent months resulting in the loss of hundreds of millions should serve as a sharp reminder of the risks associated with such trading, Leung cautioned.
The top securities watchdog official warned that many of the fundraisings are dubious, if not downright frauds.
“The issuers escape the scrutiny of the police or securities regulators because of their crossborder nature and the way the crypto assets are structured to fall outside any regulator’s perimeter.”
Leung attributed the popularity of ICO investments to a gambling mindset. She called for vigilance in addressing the new risks associated with the use of new technologies.
This is the third time that the Hong Kong SFC is raising concern about an increase in the use of ICOs to raise funds in Hong Kong.
Earlier in September last year, it had cautioned investors to be careful of potential scams as well as the investment risks involved in ICOs.
In February, SFC warned crypto investors about the risks of investment and vowed to keep policing ICOs and crypto markets.
by Joji XavierRTTNews Staff Writer
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