RWA Track Life and Death Line: "Fundraising Fraud Indefinitely" Alarm Rings Loud, Hong Kong STO 100 Million Fundraising Points to Survival - Only Compliance Prevails!

Attention! The Hong Kong "Stablecoin Regulation" has officially come into effect, but where are the pitfalls for companies laying out RWA? Asset management giant BlackRock's RWA fund "BUIDL" has raised 274 million USD in two weeks, and Boston Consulting predicts that the RWA market size will reach a staggering 16 trillion USD by 2030 - although the opportunity has arrived, the Compliance minefields could be fatal!

Illegal case: Touching the three red lines, RWA becomes fundraising fraud

Case 1: Hunan "Travel Industry RWA" Case

Description of the crime: The criminal gang uses "virtual tourism projects + RWA asset tokenization" as a guise, claiming that investing in cultural tourism real estate can yield high returns. They attract the public to subscribe to token shares through online promotions and set up a "referral" tiered reward mechanism. In reality, the project has no real asset backing, and the funds have been misappropriated for team extravagance.

Final result: In April 2025, the suspect was placed under investigation, with the main suspect being criminally detained for the crime of illegally absorbing public deposits, involving funds exceeding 30 million RMB, and the case has entered the judicial process.

Basis for penalty: In 2017, the central bank and seven ministries issued the "Notice on Preventing Risks of Token Issuance and Financing," which clearly prohibits ICO activities in mainland China.

Legal interpretation: RWA projects must ensure that the underlying assets exist and have clear ownership (such as property registration), and achieve asset and issuer bankruptcy isolation through SPV special purpose vehicles. At the same time, public commitments to fixed returns (such as "annualized XX%") are prohibited, otherwise it may be deemed as a disguised absorption of deposits, triggering the regulation of Article 2 of the "Regulations on Preventing Illegal Fundraising."

Case 2: Real Estate NFT Fundraising Fraud

Crime Description: A certain team segmented the income rights of commercial real estate into NFTs for sale, claiming "guaranteed profit" and initially attracting investment with false operating data. Later, due to actual earnings falling short of the promised 30%, the project party misappropriated funds to cover the deficit and forged transaction records, resulting in investors being unable to redeem their investments.

Final result: In 2024, multiple investors reported to the police collectively, who initiated a case for fundraising fraud. The main suspect was arrested and the properties involved were seized, but the investors suffered a principal loss rate of over 70%.

Basis for penalty: Article 192 of the Criminal Law: Fabricating asset values to defraud funds, with the subjective intention of illegal possession (misappropriation of funds, falsification of data); in conjunction with Article 19 of the Regulations on Preventing and Dealing with Illegal Fundraising, tokenized assets fall under the category of "disguised deposit absorption."

Case 3: Illegal Business Crimes (Cross-Border Battery Swap RWA Project)

Description of the offense: A battery swapping company packaged its power battery assets as RWA tokens and sold them to mainland users through overseas platforms without approval, promising "high cross-border returns." This essentially violates foreign exchange controls and conceals the fact of repeated collateralization of assets, involving over 2,000 investors.

Final result: In March 2025, accused of illegal business operations, the actual controller of the company was subjected to criminal coercive measures, the project was frozen and entered the clearing process.

Basis for punishment: Article 225, Item 3 of the Criminal Law: Operating securitization business without permission; simultaneously violating Article 45 of the Foreign Exchange Management Regulations (cross-border illegal financial activities). Judicial authorities determine that tokenized assets belong to "disguised futures trading."

Legal Interpretation: Issuing RWA tokens domestically requires a licensed institution to lead (such as a broker with an ABS license). The cross-border structure must comply with foreign exchange registration (Document No. 37) and the Cyberspace Administration's data exit security assessment. The act of re-mortgaging assets will directly violate Article 175-1 of the Criminal Law "Fraudulent Loans/Bill Acceptance Crime" and must be avoided through the uniqueness of blockchain certificate storage.

Compliance Case: The Breakthrough of Hong Kong's First STO

Compliance case one: Certain Capital (Hong Kong Real Estate STO project)

Project Description:

The project uses rental income and asset appreciation of real estate funds as underlying assets, employing a hybrid chain rights confirmation structure and low-frequency smart contracts to achieve automated rights distribution, and completes the issuance and management of tokenized assets (STO) through the compliance framework of the Hong Kong Securities and Futures Commission (SFC).

Compliance Focus:

① Obtained Hong Kong Securities and Futures Commission license 4 (advisory) and 9 (asset management), strictly targeting qualified investors;

② Relying on the offshore SPV structure to isolate risks, the closed-loop funds comply with foreign exchange regulations;

③ Tokens are defined as security tokens (STO), avoiding the "virtual currency" red line.

Issuance results:

Successfully raised 100 million HKD, becoming a benchmark case for RWA in Hong Kong.

Compliance Case 2: A New Technology (Hong Kong Charging Pile Income Rights STO Project)

Project Description:

The project uses the operating revenue rights of 9,000 smart charging piles as the underlying asset, deploying a regulatory consortium blockchain and a dynamic oracle system to tackle the challenges of high-frequency micro-value revenue rights securitization, achieving fully traceable cash flow of charging service fees and second-level revenue sharing. Additionally, it completes the issuance and management of Asia's first tokenized asset of charging infrastructure revenue rights (STO) through the compliance framework of the Hong Kong Securities and Futures Commission (SFC).

Compliance focus:

① Obtained the Hong Kong Securities and Futures Commission License No. 5 (Automated Trading Services) Special Permit, limited to professional investors for subscription, strictly implementing the qualified investor access mechanism;

② Adopt a revenue rights trust segmentation structure to isolate asset risks, with fund flows being settled in a closed loop through licensed custodian banks, in compliance with cross-border payment regulatory requirements;

③ The token is clearly defined as a security token (STO), anchored to the cash flow revenue of charging stations for the next 5 years, avoiding disputes regarding the attributes of virtual currency.

Issuance results:

Successfully raised 92 million HKD, with an oversubscription rate of 180%, becoming a benchmark case for RWA (Real World Asset) tokenization in the Hong Kong new energy sector.

Professional lawyers provide the following guiding conclusions: three major legal traps and ways to break through.

RWA Knowledge Circle Insights: Five Key Passes for Project Implementation

Businesses need to grasp five key rules in advance for RWA layout:

Asset penetration scanning: 70% of enterprises misjudge asset value, and it is necessary to establish a field team (industry + finance + Web3) to verify the underlying asset ownership, cash flow stability, and bankruptcy isolation feasibility, eliminating "air profit rights";

Technical Compliance Symbiosis: The token model mandates the embedding of AML circuit breaker procedures, with smart contracts undergoing national-level dual audits (function + security). The cross-border architecture requires a "funds closed-loop three gates" (Hong Kong SPV → licensed payment → QFLP repatriation);

Fundraising Legal Firewall: Strictly adhere to the 200-person private placement limit, with legal documents anchoring the pure income right certificate attributes (referencing a certain new technology charging pile RWA compliance structure);

Secondary Liquidity Engine: Exclusive access to licensed market makers in Hong Kong (such as HashKey), real-time disclosure of on-chain asset pledge rates, using a burn mechanism to stabilize stablecoin prices;

Community Value Operations: Disable price predictions and focus on asset performance weekly reports (such as charging pile usage rate), dynamically adjust release models to respond to regulatory changes.

In practice, companies often lack full-stack capabilities across finance, technology, and Compliance. At this time, they can leverage professional industry empowerment platforms—ranging from asset penetration, SPV structure construction, customized Compliance fundraising documents, to the introduction of secondary liquidity and community operation solutions—providing a one-stop solution that covers five key aspects, helping projects safely, quickly, and in Compliance to land during peak periods.