The financial regulator of Hong Kong called ICO “blatant fraud”

The financial regulator of Hong Kong called ICO “blatant fraud”

The Commission on securities and futures of Hong Kong (SFC) has publicly expressed their skepticism about primary offerings of coins (ICO).

Speaking at the event dedicated to the investment industry Julia Leung, Deputy head of the Commission on securities and futures in Hong Kong, has again warned the public about the risks associated with the ICO:

“Although we recognize that innovative technologies such as the Blockchain, have the potential to improve the efficiency of the financial sector, it does not give anyone the right to hold public fundraising, violating the legislation on securities”.

Julia Leung also expressed concern that, despite the loud statements, many of ICO projects in fact may not offer the promised technological innovation, which means big risks for investors:

“Many ICO questionable, if any, are outright fraud. Issuers manage to escape from the scrutiny of the police or securities regulators due to the transboundary nature of their projects, as well as the nature of cryptocurrency”.

Also the head of the SFC commented on the recent closure of one of the local ICO-projects, in which, in the opinion of the regulator, offered in Hong Kong of unregistered securities. Earlier, SFC ordered several cryptocurrency exchanges to delist tokens obtained during the ICO, on the basis of their consideration by the Agency as securities.

In the framework of its activities, the SFC seeks to educate the public about the alleged risk of investing in cryptocurrencies. In January, the Commission on securities and futures of Hong Kong launched a campaign in the media using the underground network of the city, with the aim to ease the growing public interest in investments through ICO.

In his speech Leung explained the popularity of such investments. Based on her statements ICO appealing through the spirit of adventurism among the users:

“Most of those who invest in the ICO understand that tokens have no value, but rely on their fast growth on the secondary market.”

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