Signum Digital, a Coinstreet and Somerley joint venture, has announced that it has received approval in principle from the Hong Kong Securities and Futures Commission (SFC) for its security token offering (STO) and underwriting platform. The STO platform, to be managed under the “CS-Pro” brand, is a new category of virtual assets based on blockchain technology that represents ownership of tangible assets such as private stocks, real estate, art, and collectibles. STOs, tied to real-world assets, are expected to reduce risk for potential investors, ease their research process, and provide a basis for the market value of the investment opportunity.
Signum Digital claims that its platform is a pioneer development in Hong Kong. After receiving final clearance from the Hong Kong SFC, the CS-Pro platform will allow investors to invest in tangible assets through security tokens. The SFC’s approval in principle for Signum Digital’s STO platform comes after the Hong Kong SFC published draft regulations for virtual asset trading platforms last month, urging the general public to provide input. The upcoming licensing system, scheduled to start in June, requires digital currency exchanges to submit applications for licenses that would allow everyday investors to trade specific large-cap tokens.
Hong Kong has been proposing new initiatives for the city’s cryptocurrency and digital asset sector since last year, when it invited companies interested in providing STO services to submit proposals. Cryptocurrency exchange Huobi Global also announced last month that it is applying for a license to operate in Hong Kong, possibly moving its headquarters from Singapore to the special administrative region. Recently, Hong Kong has shown a lot of interest in becoming a crypto hub, having invested heavily in supporting the potential of technologies like Web3.
In mid-December, Hong Kong launched its first two exchange-traded funds (ETFs) for cryptocurrency futures, which raised more than $70 million before their debut. The event came shortly after the head of the Hong Kong Securities and Futures Commission announced in October that Hong Kong is willing to distinguish its approach to crypto regulation from the Chinese crypto ban enforced in 2021. Hong Kong’s regulatory framework has as aim to strike a balance between protecting investors and fostering innovation in the fintech sector, including virtual assets. The approval of Signum Digital’s STO platform is expected to further strengthen Hong Kong’s position as a leading hub for the digital asset industry.
