The securities regulator of Hong Kong, the Hong Kong’s Securities and Futures Commission (SFC), is shoring up efforts to regulate cryptocurrency exchanges associated with initial coin offerings (ICOs).
In a statement that was released earlier today, the SFC disclosed it has already sent warning letters to seven cryptocurrency exchanges telling them that certain tokens being traded on their platforms may be defined as securities.
Though the names of the exchanges were not made public, the SFC said they are either based in or connected to Hong Kong, and among the top 20 in volume across the world.
According to the note, the move is part of a wider campaign by the SFC to warn investors about the impending risks of trading cryptocurrencies, one that started on a tamer note with a warning on the potential risks of the ICO fundraising model on September 5 of last year.
Notably, the SFC said that the inquiry might lead to more actions, but that so far the exchanges that were given the notices have all responded to the inquiry.
“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 release said.
The SFC has also sent communiques to seven unnamed ICO organizers that are soliciting investors from Hong Kong and whose tokens are deemed as securities by the agency.
Stepping away, the move comes after the SFC’s collaboration with the Hong Kong government, one that just recently found the two agencies initiating a public campaign to give citizens more information on potential risk, fraud and hacking issues regarding cryptocurrency.
Moving forward, the agency said it would not bear further violation or repeated offense to Hong Kong’s securities laws.
“We will continue to police the market and enforce when necessary,” said Ashley Alder, the SFC’s Chief Executive Officer.
“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.”