Following on from the SFC’s statement in September 2017 regarding ICOs, the SFC has now halted an ICO Black Cell Technology Limited to the Hong Kong public and procured the unwinding of transactions related to Black Cell’s ICO over concerns that Black Cell had engaged in potential unauthorized promotional activities and unlicensed regulated activities. (Link here)

The SFC has pointed out that Black Cell’s ICO was considered to be a Collective Investment Scheme (“CIS”) by the SFC on the basis that Black Cell’s ICO promoted the sale of digital tokens to investors through its website (accessible by the Hong Kong public), which informed potential investors that the ICO proceeds would be used to fund the development of a mobile application and holders of the tokens would be eligible to redeem equity shares of Black Cell.

With the SFC’s first authoritative action having now taken place within the world of ICOs, the SFC has outlined quite clearly that tokens offered in an ICO having any features of a security must be offered in compliance with the authorization and licensing requirements under the Securities and Futures Ordinance unless the statutory exemptions apply.

For more information on all securities, licensing and related matters in Hong Kong, please contact:-

Chris Lambert               | clambert@robertsonshk.com |  +852 2861 8417

Charles Mok                  | charles@robertsonshk.com    |  +852 2861 8440

Avinash Hotchandani  | avinash@robertsonshk.com   |  +852 2861 8458