Categories: ICO

Hong Kong Securities Regulator Shuts Down ICO, Makes Company Issue Refunds

Click here to view original web page at cointelegraph.com

The Hong Kong Securities and Futures Commission (SFC) has stopped Black Cell Technology’s Initial Coin Offering (ICO) on the grounds that the offering constituted an unregistered Collective Investment Scheme (CIS), according to a SFC website bulletin posted today, March 19.

Black Cell must now refund Hong Kong investors of their investments in the token, which would support a mobile app call “Krops,” a marketplace for listing agricultural products.

Black Cell promoted its ICO on its website, telling investors that their investments would finance the development of the mobile app and give token holders the rights to equity shares of Black Cell, a practice that the SFC considers a CIS and thus a “security”, thus needing prior registration with the regulator before being sold to investors.

The Philippines Securities and Exchange Commission had filed a cease-and-desist order against four companies associated with Black Cell and Krops in late January of this year, also for offering unlicensed securities in the form of the Krops token.

The US Securities and Exchange Commission (SEC) has also taken a strict line on ICOs adhering to securities laws, with SEC head Jay Clayton recently noting that every ICO he has seen should be considered a security, and needs to be registered with the SEC before being sold to US investors.

The Praetorian Group, a “Cryptocurrency Real Estate Investment Vehicle,” (CREIV) may launch the first SEC-registered ICO in the US, after it was reported earlier this month that they filed their coin offering as a security.

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