(Yicai Global) March 20 -- The securities regulator of China's Hong Kong Special Administrative Region has intervened in an initial coin offering in the city, which resulted in the issuing company halting the transaction. It is the first time the Hong Kong regulator publicly named a company in such an action.

The Securities and Futures Commission, SFC, stopped Black Cell Technology Ltd. from selling the digital currency yesterday, saying that the company conducted unauthorized marketing activities without a license. Black Sell cancelled the transaction and agreed to return the digital coins to the regulator, SFC said on its website.

Black Cell promoted the sale of the digital currency to Hong Kong buyers through its website, saying that it will use the proceeds to develop a mobile application. The coin holders were offered equity in the company for their investments.

SFC said the company "engaged in potential unauthorized promotional activities and unlicensed regulated activities." Black Cell will refund Hong Kong buyers until March 29, it said on its website.

The company also promised not to design and promote any transaction that may constitute a "collective investment scheme" unless it meets relevant requirements under Hong Kong's Securities and Futures Ordinance.

If an ICO involves making an offer to the public to purchase an interest or participate in a collective investment scheme, it is required to obtain prior approval or ensure compliance with licensing requirements under the Securities and Futures Ordinance unless it is exempted. The rights in collective investment schemes are regarded as "securities" as defined in the Securities and Futures Ordinance, the statement said.

Last February, SFC issued a statement saying that due to potential risks, it will continue to monitor and supervise the market and take action when necessary. It also sent letters to seven ICO organizations that were soliciting investors in the local market, warning them that digital tokens involving ICOs would be considered securities and will be subject to supervision.

China's financial regulators have embarked on a nationwide crackdown of illegal financial transactions conducted under the guise of virtual currency innovation.  China's central bank also banned initial coin offerings last September.