News of “Broken Tooth” Wan Kuok-koi’s involvement in a planned multimillion-dollar cryptocurrency share offer – known in digital business parlance as an initial coin offering (ICO) – has sparked fresh concerns over fintech regulations.

The offering, originally planned for Hong Kong this month, is intended to raise US$500 million to bring blockchain technology to Macau, the world’s most cash-rich gambling hub. The plan is closely connected to casino junket operators in the former Portuguese enclave.

It would be the world’s biggest single ICO to date when compared with past transactions listed on research site Cointelegraph, Reuters reported.

Former Macau gangland boss enters into multimillion-dollar casino cryptocurrency deal

Coming just weeks after Beijing instituted a crackdown on cryptocurrencies due to concerns over fraudulent fundraising, speculative investment and capital flight, the planned ICO involving Macau Dragon Group and the Thailand-based Wi Holding Company Limited has revived worries investors could be left high and dry without any legal recourse or compensation should things turn sour.

Wan’s involvement was revealed last month when the South China Morning Post obtained and published photographs – verified as genuine by sources with knowledge of the ICO – showing the former gangster at a signing ceremony to seal the deal between the two companies.

According to Reuters, funds raised would also be used to fund the construction in Norway of an eco-friendly floating casino hotel that would be transported to Macau in 2020.

Last week, Milos Andric, the chairman of Norwegian maritime design firm Brova Idea, told Reuters his company had been contracted to build the hotel.

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Andric said his company was in the process of conducting engineering for the floating project. He declined to reveal the identity of his client, citing confidentiality.

However, virtual currency investors remained sceptical about the deal being completed.

Leonhard Weese, president of the Hong Kong Bitcoin Association, claimed the ICO space was becoming exuberant and questioned the fundraising for the floating casino.

He said such an offer was equivalent to about one per cent of the bitcoin supply.

As the fintech industry continues to expand, regulators around the globe – including Hong Kong last month – have introduced a concept from the world of software development called the “sandbox”.

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The “sandbox” is a tool allowing developers to test a technological proof of concept before a full-scale public release.

Since the launch of the UK’s regulatory sandbox in May last year, regulators across the globe have adopted similar frameworks. There are now regulatory sandboxes in Abu Dhabi, Australia, Canada, Hong Kong, Lithuania, Singapore, Switzerland and Thailand, to name a few, and the European Union recently put forward proposals for a possible EU-wide regulatory sandbox.

A spokesman for the Hong Kong Securities and Futures Commission said the body had been “closely monitoring ICO activities in Hong Kong and elsewhere”.

“The SFC regulatory sandbox is only available to licensed corporations or start-up firms that apply to SFC for a licence to carry on regulated activities under the SFO,” he added. “If the technology firm does not intend to carry on any regulated activity itself, it is not eligible for the sandbox.”