“Everything you need is here. We have the procedures set up, and we’ve shown they work on successful token sales. There are advisers here and plenty of investors,” he said.

“Cryptocurrencies are at the heart of the future of finance. If we get this right, it could set Hong Kong up as a financial services centre for the next 50 years.”

Between 10 and 20 companies will carry out ICOs in Hong Kong in the next six months, according to Invest HK’s head of fintech Charles D’Haussy. These include Hong Kong based companies, as well as those operating overseas but coming to the city to carry out an ICO.

One such company is Airswap, a decentralised exchange, whose founders are from North America but have set up their company in Hong Kong.

“We will have a token sale in October and will sell up to a hard cap of US$40 million worth of tokens,” said Sam Tabar, one of the company’s co-founders.

“The co-founders all have experience doing business in Asia, and we felt Hong Kong was the right place for us. The market is fast developing and we wanted to get in early and try to shape it.”

An ICO is a means by which companies developing projects using digital tokens can raise capital. Each project will use their tokens in different ways, but as with traditional money, they may be used as a store of value, a medium of exchange, a unit of account, or some combination of them all.

Investors purchase tokens before the launch of the project, hoping it will be successful and the tokens will acquire real value so they can be traded on the many cryptocurrency exchanges springing up around the world.

The amount of cash raised in an ICO in Hong Kong is broadly analogous to early stage venture capital investment. Simon Cheong, Gatcoin’s founder and chief executive, said it was targeting a minimum of US$20 million and a maximum of US$60 million from its Hong Kong ICO in October.

So far this year over US$2 billion has been raised from ICOs around the world, according to data from crypto information provider CoinDesk.

There has also been a sea change in terms of the companies carrying out ICOs.

“We are definitely moving from a two geeks with a whitepaper and bootstrapping model to increasingly experienced teams with a long term business plan working with reputable service providers,” said Henri Arslanian, PwC fintech and regtech leader for China and Hong Kong.

More professional companies hire a variety of advisers, and in Hong Kong there are now a plethora of consultancies, law firms and professional service firms advising on ICOs, with Arslanian himself an example.

The same holds true when it comes to investors. “There are now a number of family offices looking to invest in cryptocurrencies,” said Chu. The presence of these investors and advisers is helping Hong Kong to grow in prominence as an ICO centre.

But Hong Kong is by no means unique in this regard. “When I started on the ICO process about two years ago, there was not much of an ecosystem. Now it feels almost like the investment banking sector,” said Lucas Geiger, co founder of Wireline, which has an ICO planned in the US on October 16.

“Not only are there many family offices looking to invest in ICOs, brokerages looking to set up meetings between myself and the family offices have even sprang up,” he said.

Such advisers are becoming increasingly necessary as regulators start to look more closely at the ICO process. Chu explained that one reason why companies doing ICOs look to Hong Kong is that regulation from the US Securities and Exchange Commission (SEC) is becoming more onerous.

In early September the People’s Bank of China banned ICOs and Macau’s monetary authority has forbidden banking and payment institutions from taking part in or providing services to ICOs.

Hong Kong’s Securities and Futures Commission issued a statement earlier this month in which it said some tokens could be treated as shares in a company and as such would be governed by securities regulation.

All the ICO companies interviewed for this article said they welcomed the clarification, saying that tighter regulation would benefit the industry by driving fake ICOs out of the marketplace.

“One of the major problems we learned from our preliminary ICO was dealing with scammers,” said Jonathan Lee, co-founder of 300 Cubits, whose pre ICO, a sale of 2 per cent of their tokens, finished in mid September.

“We heard that people on social media were asking, ‘are these real people, or just a picture and a bio?’, and they were right to as we also discovered that there were some scammers impersonating us and sending false links to subscribe to our ICO.”

Across Hong Kong’s emerging crypto community there are concerns about scams because they could bring the developing sector to a screeching halt.

“There are so many ways to scam people with an ICO,” said Leonhard Weese, president of the Hong Kong Bitcoin Association.

“Investors beautifully admit that most of these start-ups will fail, so all you need to do is raise a few million, appear busy on social media for a few years and then say you ran out of money and blame it on competition, or developers or bitcoin,” he said.

“Alternatively you could ‘hack yourself’ and retire immediately, or just buy yourself a quiet island and let everybody slowly figure out you used a fake name.”

Even a genuine ICO that fails could have ramifications. “I’m afraid that some members of the general public are not well informed enough to start investing in cryptocurrencies,” said Vincent Poon, who runs a crypto-education group in Hong Kong. “For people who don’t know enough to start speculating, is a very risky activity.”

Regulators get edgy when retail investors start speculating on new areas of finance. The Lehman minibonds scandal was 10 years ago but still casts a shadow over the market.

“There are two possible ways forward for token sales in Hong Kong,” said Chu. “The first is that things continue as they are, with the throttle at 150 per cent, and Hong Kong becomes a real centre for cryptocurrencies.

“The second is that there is a black swan event, for example a big token sale turns out to be a scam, and either the Hong Kong or mainland Chinese authorities step in and regulate the whole process much more strictly. Things would still continue, as there is utility in token sales and cryptocurrencies, but much more slowly than they are at present.”