Tue, May 21, 2019 - Page 12 News List

FSC outlines utility token regulations

By Kao Shih-ching  /  Staff reporter

A few companies have issued utility tokens recently, but they cannot promise returns or claim to be investment vehicles, the Financial Supervisory Commission (FSC) said yesterday.

“We will investigate whether these digital tokens are utility tokens or securities tokens in disguise,” Securities and Futures Bureau Deputy Director-General Tsai Li-ling (蔡麗玲) told the Taipei Times by telephone.

Utility tokens can only be exchanged for the issuer’s products or services, Tsai said.

However, some issuers seemed to imply that their tokens could generate returns on investment, she said.

“Utility tokens should be different from securities tokens, so we do not want to see issuers cross the line,” Tsai said.

The commission does not have rigid regulations for utility tokens, viewing the trade as similar to that of normal goods, Tsai said, adding that the commission is mulling subjecting them to the rules for securities tokens.

Her remarks came after electronic voucher issuer Mohist Web Technology Co (墨攻網路科技) and pet care service provider PetTalk Inc (寵聚) last week announced utility tokens valued at NT$10 and US$0.06 respectively.

They are to be traded on local exchanges later this year.

“It is difficult to forecast whether prices will go up or down, as there is no clear indication of supply and demand at the moment,” BitAsset Exchange director Martin Yeh (葉佳彥) said last week.

“However, we are sure that prices will be volatile, tracking with the issuers’ business performance,” Yeh said.

PetTalk’s utility tokens are to be traded on BitAsset.

BiTiffany Universal Inc (幣鑽環球), which helped launch PetTalk’s tokens, forecast prices would hit US$1 on the back of the company’s increased business, cofounder Chevy Yang (楊秋霞) said.

“We will control the number of Pet Tokens in the market. If needed, we will buy back some and destroy them to prevent prices from falling,” Yang said.

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