Hong Kong Regulator Halts ICO

Hong Kong’s SFC has ordered Black Cell to cease offering its ICO to investors based in the autonomous Chinese territory. The SFC has expressed “concerns that Black Cell had engaged in potential unauthorized promotional activities and unlicensed regulated activities.”

The SFC states that Black Cell has “agreed to unwind ICO transactions for Hong Kong investors by returning the relevant tokens” contributed by investors. In order to address the regulator’s concerns, the SFC states that “Black Cell has also undertaken not to devise, set up or market any scheme that constitutes a Collective Investment Scheme (CIS) unless in compliance with the […] Securities and Futures Ordinance.”

The SFC reminded “Parties engaging in ICO activities […] to seek legal advice […] about the applicable legal and regulatory requirements,” warning that “Where an ICO involves an offer to the Hong Kong public to acquire an interest or participate in a CIS, prior authorization or licensing requirements under the SFO may be triggered unless an exemption applies. An interest in a CIS is regarded as ‘securities’.”

Black Cell Subject of Regulatory Action From Philippine Authorities in January

Two months ago, the Philippines Securities and Exchange Commission (SEC) filed a cease-and-desist order again four companies and Filipino resident Joseph H. Calata for operating Black Cell’s ICO.

The order notes that “The same Joseph H. Calata was permanently disqualified by the Philippine Stock Exchange from being a Director or Officer of any listed company” as “He is the Chairman, President, and CEO of Calata Corporation, which was delisted from the Philippine Stock Exchange for non-disclosure of material information.”

The Philippine SEC stated that “there is substantial evidence that [Black Cell] are selling or offering securities in the form of KROPS Tokens and/or Kropcoins to the public, in the Philippines, without the necessary license from the Commission.”

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