By Jon Russel for TC
Most financial authorities worldwide have warned their citizens on the risks of buying bitcoin or investing in ICOs, but Hong Kong is going a step further. Concern is such in the country that authorities are taking to TV and other media to warn of the risks of investment.
Today the Financial Services and the Treasury Bureau (FSTB) and the Investor Education Centre (IEC), which is a subsidiary of the Securities and Futures Commission (SFC), launched a public campaign to raise awareness of the “potential risks” of investing in ICOs and buying cryptocurrency. That will include TV and print media spots with warnings.
Last September, the SFC expressed “concern” at the boom in ICO funding, which saw nearly $4 billion in capital raised in 2017. Not only are investments unregulated, but there’s increasing concern that some tokens — which are distributed during an ICO in exchange for fiat sums or cryptocurrency — may violate securities laws.
Added to that, this new industry is awash with fraud. A recent report from Ernst & Young found that 10 percent of funds raised from ICOs was stolen or lost. Telegram’s upcoming $1.2 billion ICO, for example, launched at least a dozen scam sites that duped would-be investors. While this past weekend, a Japanese exchange claimed to have lost over $400 million in tokens.
In a statement, Dr. Kelvin Wong, the Chairman of the IEC, explained why “high-risk” crypto investments “are not suitable for everyone.”
“‘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,” he said.
There’s no preview of these adverts, but the campaign will begin this week with notices on Hong Kong’s MTR stations, and within print and digital media. A number of websites have also been set up, the image above is taken from one of them.
The TV campaign is scheduled for March, and it’ll be accompanied by radio ads and a video for social media.
Disclosure: The author owns small amounts of cryptocurrency.