Hauzen LLP advised China Information Technology Limited (Stock Code: 8178.HK) (“CITD”) in Hong Kong’s first successful security token offering (“STO”) by a Hong Kong listed company.
These standards provide greater efficiency, security, and transparency for bondholders as the token itself is fully tokenized and becomes the security. DOT-standard STO eliminates the need for a third-party custodian to hold onto the bonds, and investors can directly hold and control their own securities. It also eliminates complex trust structures prevalent in early ‘STO’ projects in other jurisdictions. As such, DOT-standard STO creates the world’s first truly non-synthetic security product.
CITD’s STO project is designed to be aligned with China’s 14th Five-Year Plan and Hong Kong’s vision of becoming an international innovation and technology hub, the government has introduced measures to foster the growth of Web 3, blockchain assets, and smart city initiatives.
At the conclusion of CITD’s STO, a celebration luncheon was held on 13 July 2023 which had been attended by Dr. Tony Wong, JP, Chief Information Officer, representatives from the Legislative Council including Stanley Li Sai Wing, MH JP, Dr Hon Tan Yueheng JP, Hon Edmund Wong Chun Sek, and Hon Robert Lee Wai Wang, and various representatives from the Government of Hong Kong SAR.
“We are excited to have contributed to Hong Kong’s first DOT Standard Security Token Offering and to have helped pave the way for the widespread adoption of this technology. Only a fully tokenized security can provide a real non-synthetic bond. Tokenization will be at the core of our work as we launch the world’s first Blockchain, Tokenization and Web3 (“BT3″) practice at Hauzen LLP,” said Julian So, who heads the BT3 practice at Hauzen LLP.
Joshua Chu, Of Counsel at Hauzen LLP, added, “I am very proud to have advised on Hong Kong’s first successful DOT Standard Security Token Offering. This innovative approach to bond issuance is in line with the government’s policy to foster innovation and technology in the region and is a prime example of how blockchain technology can be leveraged to provide greater efficiency, security, and transparency for investors.”
“CITD’s blockchain-based bond issuance is Hong Kong’s first private sector bond issuance that has been done completely on the blockchain. This is significant as it represents a pioneering intersection between the fintech world – for many years a niche market – with traditional finance,” said Managing Partner of Hauzen LLP, Basil Hwang. “We expect many more to follow in its wake, and are excited to be the law firm advising on this groundbreaking transaction.”
The Hauzen LLP team was led by Basil Hwang, Julian So, and Joshua Chu, with support from Christie Liu.
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