Hong Kong Securities Regulator Promises to Keep ‘Close Watch’ on Crypto Sector

Hong Kong’s Securities and Futures Commission (SFC) says in their 2017-2018 annual report released today, June 27, that they will “keep a close watch” on crypto and Initial Coin Offerings (ICO).

The SFC notes that since new technologies “come with risks,” they will be looking closely at crypto and ICOs and “intervening when appropriate.” The report states that the SFC took regulatory action against crypto exchanges and ICO issuers in Hong Kong this year, and released two public warning to investors about the risk of investing in crypto.

The SFC report also includes the agency’s supportive actions in the crypto sphere, highlighting the launch of the SFC regulatory sandbox that allows “qualified firms to conduct regulated activities utilising financial technologies.” The SFC also reports it is working with the Investor Education Center to release educational materials on crypto, as well as public campaigns about the “risks associated with ICOs and cryptocurrencies.”

The SFC’s first statement and circular on ICOs was released in September 2017, with a second circular published in December 2017 on the regulatory requirements for cryptocurrency operators. The SFC issued another statement in February after taking action against crypto-related firms.

In March, the SFC halted Black Cell Technology’s ICO on the grounds that it constituted an unregistered security, with the company responsible for refunding investors in its token.

At the beginning of May, a Hong Kong government report said that virtual currencies like Bitcoin (BTC) are not particularly involved in either money laundering or terrorism financing.