Hong Kong’s insurances regulator appears to be stepping up efforts to regulate cryptocurrency exchanges Byzantine with initial coin offerings (ICOs).
In a statement released Friday, Hong Kong’s Sanctuaries and Futures Commission (SFC) revealed it has sent warning letters to seven cryptocurrency switches advising that certain tokens being traded on their daises may be defined as securities. Though the names of the exchanges were not disclosed, the SFC recommended they are either based in or connected to Hong Kong, and among the top 20 in loudness globally.
According to the note, the move is part of a wider effort by the SFC to discretion investors about the risks of trading cryptocurrencies, one that began uncountable mildly with a warning on the possible risks of the ICO fundraising model on Sept. 5 of at length year.
Notably, the SFC said that the inquiry may result in further skirmish, but that so far the exchanges notified all responded to the inquiry.
“Most of these cryptocurrency interchanges either confirmed that they did not provide trading services for such cryptocurrencies or swallowed immediate rectification measures, including removing relevant cryptocurrencies from their rostra,” the release reads.
The SFC has also written to seven unnamed ICO organizers that are enticing investors from Hong Kong and whose tokens are considered as guarantees by the agency.
Stepping back, the move follows the SFC’s partnership with the Hong Kong superintendence, one that recently found the two agencies launching a public campaign to instruct citizens on potential risk, fraud and hacking issues regarding cryptocurrency.
Present forward, the agency said it will not bear further violation or retold offense to Hong Kong’s securities laws.
“We will continue to the gendarmes the market and enforce when necessary,” said Ashley Alder, the SFC’s Chief Administration Officer. “But we are also urging market professionals to do proper gatekeeping to ban frauds or dubious fundraising and to assist us in ensuring compliance with the law.”
Hong Kong view image via Shutterstock
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