ICO regulations can help mold eco-system: InvestHK exec
[THE INVESTOR] TOKYO -- Initial coin offerings have been recently gaining traction. Are they the scam of the century, or the next best thing since IPOs?
The jury is still out, but nevertheless, regulators in major economies are slamming the brakes on ICOs, including in Hong Kong -- where authorities proclaimed on Sept. 5 that they do fall under securities laws, and should therefore be regulated.
The official remarks from Hong Kong authorities came a day after Beijing decided to ban all ICOs. Korea has since followed suit.
“This is like saying ICOs are (still) welcome in Hong Kong. However, we have a set of regulations in place that can be applied, and are happy to regulate them, but not cryptocurrency itself,” said Charles D’Haussy, head of fintech at InvestHK, in a recent interview with The Investor.
Charles D’Haussy, Fintech head at InvestHK.
InvestHK is Hong Kong’s official organization responsible for foreign direct investment and supporting businesses with their operations.
ICOs raise money by issuing crypto coins -- a blockchain-based currency. It’s similar to crowdfunding but different in that it uses digital money, but the problem is that there’s no way to protect investors from fraud or losses.
Despite the drawbacks, startups have raised US$2.4 billion from ICOs, according to data website Coinschedule.com.
As head of the Asian and global fintech operations of InvestHK, D’Haussy frequently visits Tokyo, where his organization is building bridges with Japan’s up-and-coming fintech firms.
“We recently met a lot of blockchain companies looking to expand in Hong Kong and East Asia, mostly in the areas of wealth management and wealth technology,” he said.
Ever so cautious in new endeavors, the Japanese government appeared a bit out of character when it announced this year it was considering integrating blockchain systems into its online systems for accepting government bids to see how much the new tech can improve the existing process.
Despite skepticism about cryptocurrencies in general, D’Haussy said he sees blockchain as being a big part of the global fintech scene for the time being.
By Kim Ji-hyun (email@example.com)
Editor-in-Chief of The Investor