Hong Kong’s Securities and Futures Commission warns about risks associated with STOs

Quick Take

  • Hong Kong’s finance watchdog takes STOs under the microscope

  • SFC offers guidance regarding relevant licensing and registration, due diligence, and risks associated with digital assets

Hong Kong’s Securities and Futures Commission has issued guidance for parties that take part in security token offerings (STOs).

SFC warning reminds investors to be cautious when dealing with digital assets, including security tokens, which have long been viewed as a safer alternative to so-called initial coin offerings. According to SFC, digital assets are at risk of volatility, hacking and fraud—and the regulator warns security tokens are not exempt from those risks.

Security tokens are asset-backed tokens that use blockchain technology, simil