You are here

Hong Kong Regulators Name And Shame ICO For “Unlicensed Regulated Activities”

hong kong skyline

Compared to mainland China, Hong Kong has been a friendly territory to ICOs, and many Asian startups have chosen the territory as a venue to launch their token offerings. However, even Hong Kong regulators have their limits.

The Hong Kong Securities and Futures Commission (SFC) has just announced that it has stopped the ICO of the firm Black Cell Technology from selling to Hong Kong investors. Though the SFC has previously stepped in on various ICOs, this is the first time the body has named the ICO in question.

Citing the company’s use of “unauthorized promotional activities and unlicensed regulated activities”, the SFC says that following “regulatory action”, Black Cell Technology has agreed to halt “its initial coin offering (ICO) to the Hong Kong public” as well as “unwind ICO transactions for Hong Kong investors” who had already invested.  

The structure of the ICO appears to have been the main trigger for the SFC response. The SFC announcement states that Black Cell Technology had promised that “holders of the tokens would be eligible to redeem equity shares of Black Cell”. For the regulators this looks a lot like an unregistered Collective Investment Scheme (CIS).

Black Cell Technology Limited are behind the KROPS ICO, a proposed agriculture marketplace which, according to the website, “has the potential of becoming the largest food hub in the world without even owning a single farm”.

This is not the first time that the ICO has found itself on the wrong side of Asian regulators. In January, the Philippines SEC issued cease-and-desist orders against four inter-related companies running the KropCoin sale, including Black Cell Technology Ltd. All companies were to refrain from selling securities within the Philippines until “the requisite registration statement is duly filed with and approved by the Commission and the corresponding license of offer/sell securities is issued.”

Image From Shutterstock

Related posts

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.