The FSC issued a press release on June 22, 2018 to explain Initial Coin Offering (ICO) fund-raising behavior and remind the public to pay attention to the related risks as follows:
1.ICO refers to the issue of virtual products by enterprises and their sale to investors to raise funds. Whether or not the virtual products issued by ICO are securities subject to the regulations of the Securities and Exchange Act should be decided case by case.
2.If the virtual products issued by ICO are securities subject to the Securities and Exchange Act, the ICO issuer offers those securities to the general public without the approval of the FSC may be in breach of regulations in Article 22 of the aforementioned Act and bear criminal liability set in Paragraph 2, Article 174 of the Act; the ICO issuer will not be exempt from the said criminal liability even it declares that the virtual products sold are not securities subject to the Act. To date, the FSC has not agreed to any cases of ICO fund raising filing for effective registration under the Act.
3.Prior to investing in the virtual products issued by ICO, the public should fully understand ICO-related investment arrangements and carefully consider investment risks.