The Hong Kong Securities Commission has issued a warning about unlicensed tokens.

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The Hong Kong Securities and Futures Commission (SFC) issued a warning regarding the “collective investment scheme”(CIS) on 30 August. CIS includes digital tokens and initial coin offerings (ICO), not authorized under the Securities and Futures Ordinance (SFO). As per the official statement,

“A CIS may not be offered to the public in Hong Kong without the SFC’s authorization”

Unauthorized ICOs will become a crime in Hong Kong as a result of this. Meanwhile, according to the circular, licenced or registered intermediaries are permitted to market recognised investment products.

The SFC, on the other hand, creates an exception and exempts professional investors from the laws governing unlawful CIS. The agency has also issued a “Suspected Unauthorized CIS Alert List,” advising investors to exercise cautious. The list will serve as an early warning system for potentially risky investments such as digital tokens and initial coin offerings (ICO).

Reiterating that the list is not exhaustive, the regulator advised investors to conduct their own research or seek expert assistance. In the event of foreign CIS investment, the SFC cautioned that domestic authorities may be unable to provide assistance.

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The abovementioned circular has been released on the back of 20 cryptocurrency hacks reported by Slowmist in August alone. Bilaxy, an exchange headquartered in Hong Kong, suffered a hot wallet hack on 29 August, accounting for losses to the tune of $21 million. At press time, the SFC Alert List included the LABS Security Token, advising investors against investment in the asset.

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