Gatecoin will delist tokens deemed as ‘securities’ by Hong Kong’s financial regulator from its exchange following a compliance review in the face of regulatory scrutiny.
Hong Kong-based cryptocurrency exchange Gatecoin has revealed that certain ICO tokens listed on its platform will be delisted if they are classified as ‘securities’ under law. As CCN reported last month, the Securities and Futures Commission of Hong Kong (SFC), the region’s chief financial regulator, expressed concerns in the increase in fundraising via initial coin offerings (ICOs).
More pointedly, the SFC claimed “certain ICOs have terms and features that may mean they are ‘securities’” despite digital tokens sold in ICOs normally classified as virtual commodities. The authority subsequently added that all parties engaging in ICO activities in Hong Kong are required to be registered and licensed by the SFC “irrespective of where they are located,” with guidelines in an accompanying framework.
As a direct result of the SFC’s regulatory stance, major Hong Kong cryptocurrency exchange Gatecoin is now undertaking a regulatory compliance review to determine the legal status of specific tokens listed on its exchange.
In an announcement, the exchange stated:
Tokens deemed likely to be categorized as securities will be delisted from Gatecoin. Once we have confirmed which of these tokens are to be delisted, clients will have one week to trade their tokens for bitcoin (BTC) or ether (ETH).
Gatecoin also confirmed that both trading and deposits of these ‘securities’ tokens will be discontinued altogether from the exchange.
The Hong Kong regulator’s statement in early September came within a day of China’s blanket ban on all ICOs after the Chinese central bank classified them as an ‘illegal’ form of fundraising. Hong Kong, a highly autonomous part of China’s ‘special administrative region’ (SAR), is taking regulated, but open approach to ICOs.