Cryptocurrency Educational Campaign Launched In Hong Kong

Announcements, Education | January 31, 2018 By:

Hong Kong’s Financial Services, the Treasury Bureau (FSTB), and the Investor Education Center (IEC) have started a public education campaign on the risks associated with initial coin offerings (ICO) and cryptocurrencies.

The campaign, launched on Jan. 29, aims to provide the public with a correct and comprehensive understanding of the potential risks of participating in ICOs and cryptocurrency transactions. The campaign will advertise on every form of media – digital as well as print. A series of advertisements will be placed at metro stations and other public places. The authorities will also use television and radio broadcasting to raise awareness.

In addition, the financial education platform of the IEC, called The Chin Family, has developed a range of educational articles and infographics to help the public understand the features and risks of ICOs and cryptocurrencies.

“The increase in media coverage and hype around ICOs and cryptocurrencies, such as bitcoin, has aroused public interest,” said Joseph Chan, Under Secretary for Financial Services and the Treasury. “However, the public might use these as speculative tools without full understanding of their nature and potential risks. Through this series of public education initiatives, the government aims to provide the public with a correct and comprehensive understanding of ICOs and ‘cryptocurrencies’, so that they can thoroughly assess the risks before making transactions or investment decisions.”

“ICOs and cryptocurrencies are high-risk products that are not suitable for everyone,” said Kelvin Wong, Chairman of the IEC. “Cryptocurrencies are not actual currencies, but a type of virtual commodity. They are not backed by any physical commodity, nor by the issuers, and are not recognized as a medium of payment or electronic currency. ‘Cryptocurrencies’ are highly speculative and are associated with various kinds of risks. Their prices may be susceptible to significant fluctuations due to speculative activities. Investors may suffer significant monetary losses as a result of the volatile prices.”

The campaign came after the Securities and Futures Commission (SFC) issued a statement on existing regulations which could be applicable to ICOs.

The SFC defines the tokens issued through ICOs as either comprising virtual commodities, securities, shares, debentures, or an interest in a collective investment scheme (CIS). The SFC said that tokens that fall under the definition of securities in accordance with the Securitites and Futures Ordinance are subject to the securities laws of Hong Kong. It also noted that shares, debentures, and interests in a CIS are all regarded as securities.