The Securities and Futures Commission (SFC), Hong Kong’s securities watchdog, has interfered with the initial coin offering (ICO) of a firm named Black Cell Technology, ordering the issuing firm to halt the sale of the digital currency to Hong Kong buyers.
The SFC accused Black Cell Technology of engagement “in potential unauthorized promotional activities and unlicensed regulated activities”.
Black Cell Technology in response halted its ICO to Hong Kong citizens and agreed to “unwind” ICO transactions for Hong Kong investors by returning the relevant tokens to them.
The SFC in its announcement wrote: “The SFC found that Black Cell had promoted an ICO to sell digital tokens to investors through its website accessible by the Hong Kong public, with the pitch that the ICO proceeds would be used to fund the development of a mobile application and holders of the tokens would be eligible to redeem equity shares of Black Cell.”
According to the SFC, such an arrangement may constitute a Collective Investment Scheme (CIS) under the circumstances.
The SFC had previously intervened with the ICO process of multiple firms, but this is the first time that the regulatory authority has publicly named a company that it has taken action against.
Black Cell’s website describes its business as a platform where users can gain “access to every food source in the world, from the biggest farms to the smallest backyard”. It further says that its mobile app “provides access to supply and demand information to aid farmers in production and assist buyers in purchasing”.
Moreover, a note on its website states that the sale is not open to citizens of the USA, Hong Kong, and other ICO-hostile areas. The company also assures visitors that it will refund Hong Kong citizens by March 29th.