The Securities and Futures Commission (SFC), Hong Kong's securities regulator, published a statement on Friday, warning investors to the potential risks of dealing with cryptocurrency exchanges and investing in ICOs.
According to the announcement, the SFC has sent letters to seven cryptocurrency exchanges in Hong Kong or with connections to Hong Kong warning them that they should not trade cryptocurrencies which are "securities" as defined in the Securities and Futures Ordinance (SFO) without a license.
It is stated that most of these cryptocurrency exchanges either confirmed that they did not provide trading services for such cryptocurrencies or took immediate rectification measures, including removing relevant cryptocurrencies from their platforms.
The SFC has also written to seven ICO issuers. Most of them confirmed compliance with the SFC's regulatory regime or immediately ceased to offer tokens to Hong Kong investors.
We will continue to police the market and enforce when necessary. But we are also urging market professionals to do proper gatekeeping to prevent frauds or dubious fundraising and to assist us in ensuring compliance with the law.
Chief Executive Officer, SFC
We have recently reported that Hong Kong is launching a public campaign to educate citizens on potential risk, fraud and hacking issues regarding cryptocurrency and ICO.