The Hong Kong Securities & Futures Professionals Association, a trade organization for the industry, has proposed that the city’s officials should think about establishing a portal for initial coin offerings (ICOs).
ICOs are a fundraising method, akin to initial public offerings (IPOs), that gained popularity following Ethereum’s debut in 2015. Several leading Web3 protocols initiated their journey through ICOs. Despite the ICO downturn during the 2017-2018 cryptocurrency winter, which saw many being labeled as scams, they proved to be profitable investments for numerous long-term investors.
However, the main issue with ICOs is that, based on current legal interpretations, the bulk of them were clear breaches of securities regulations. Hong Kong was a bustling center for ICO listings at their peak, yet regulatory authorities vigorously worked to make exchanges remove many of the tokens. The so-called “legal” ICOs, referred to as security token offerings (STOs) and emerging around 2019-2020, did not quite catch on with investors in Asia, as reported by CoinDesk at that time. Many STO platforms experienced low trading volumes.