FTAHK publishes guidance on token sales

The FinTech Association of Hong Kong (FTAHK) has published a paper outlining best practices for holding initial coin offerings (ICOs) of digital tokens in Hong Kong.

Token sales involving creating and generating new blockchain-based cryptocurrencies have become popular, having raised over US$3 billion globally in the past year.

In response, FTAHK has published a paper -- its first since launching earlier this year -- designed to provide general and practical best-practice guidance for fintech companies thinking about conducting a token sale.

The paper includes sections on understanding whether a token sale is the best fit for a particular project, legal and regulatory concerns, tax and accounting considerations, cybersecurity controls, governance and control frameworks and laws requiring appropriate know-your-customer processes.

It was written by FTAHK's policy and advocacy committee with input from lawyers, crypto advisors, accountants, tax specialists, sponsors and entrepreneurs with experience holding token sales.

“Digital assets have an important role to play in blockchain-based solutions and the digital economy.  The speed of their evolution has made it difficult for regulation to keep pace at every turn, but there have been brutal misconceptions about tokens operating in a vacuum, or conversely being inherent scam and money laundering vehicles,” FTAHK policy and advocacy committee co-chair Urszula McCormack said.

“It’s true that a token sale is not right for everyone.  However, most 'good' projects want to know how to run a strong, safe, fair and legal sale, with a long-term roadmap for success.  This paper helps them achieve that.”