A new initiative introduced by the Securities and Futures Commission (SFC) of Hong Kong will warn people about those arrangements which are suspected to be collective investment schemes (CIS), like digital tokens and ICOs.
Today, while making a public announcement, SFC informed that the CIS offerings to the Hong Kong citizens are only allowed when they are authorized by the SFC. The government body further stated that now, the investors need to be more cautious before investing in an unauthorized scheme.
The SFC in its statement has specified that any kind of investment arrangement, which already has come into the SFC’s attention and has characteristics of CIS, will be included in a new Suspected Unauthorized CIS Lists.
“Unauthorised investment arrangements are highly risky, and investors may lose all their investments…Investors are urged to check the new alert list and find out whether the arrangement is authorized by the SFC before investing.”, said Ms. Christina Choi, the SFC’s Executive Director of Investment Products.
A few years ago, the ICO infamously started trending in Hong Kong because of its fraudulent nature and since then, the regulatory watchdog has been considering it as a potential threat for the country.
During the first ICO, which happened in Hong Kong, the scammers misled the investors by collecting the money from them for a project which never was introduced into the market.
As per the report, the crypto scams in Hong Kong are increasing day by day. A few weeks ago, the country police arrested 19 suspects in a $1.4 million crypto scam.
The police, in its statement, mentioned that the arrested suspects had 9 computers, 128 smartphones, cash worth HK $1.4 million and cryptocurrency worth HK $50,000.
A month ago, four people were also arrested in Hong Kong reportedly for laundering $150 million through Singapore bank accounts of customers, in just 15 months.