Hong Kong securities regulator confirms that security tokens are securities regulator confirms that security tokens

(1) Issuers must be either be a Type 1 regulated person or quality for an exemption.

(2) Intermediaries must conduct comprehensive due diligence on the STOs they list. The SFC went on to elaborate as to precisely what such diligence entails.

(3) STO can only be sold to professional investors, and they have to provide clear information about the nature of STOs as well as their inherent risks.

The SFC confirms that conducting an STO without meeting the legal requirements— including registration and licensing— is a criminal offense in Hong Kong.