An ICO is a risky way of investing in cryptocurrency as there is no guarantee that the coin will have a long life and a natural growth. While there were many ICO’s that went good for the investors, a lot of them were considered black holes.
Now, China is announcing that a new era is coming for ICOs, and is not a good one. It appears that the Chinese government is considering to ban all future ICO’s.
A committee led by People Bank of China announced that ICO funding has disrupted the economic and financial order. But this is not the only aspect that will be changed in China’s crypto world. It seems that the same committee has prepared a list of more than 60 exchanges to be inspected while all ICOs will be frozen in the meantime.
Recently, the domestic activities of issuing financial transactions by issuing tokens, including initial token issuing (ICO), have emerged in large numbers.
The issue of financing refers to the financing of the main token by token illegal sale, circulation, to investors to raise bitcoin, currency and other so-called “Ethernet virtual currency”, is essentially a kind of unauthorized illegal public financing behavior, suspected of illegal sale promissory notes, illegal issuance of securities, illegal fund-raising, financial fraud, and other illegal pyramid selling crime activity. Relevant departments will closely monitor the relevant developments, strengthen coordination with the judicial departments and local government work, and strictly enforce the law in accordance with the current working mechanism, and resolutely control market chaos. Found suspected crimes, will be transferred to judicial organs.
The issue of financing the use of tokens tokens or “virtual currency” is not issued by the monetary authorities do not have the law, such as monetary compensation of the mandatory property, does not have legal status and monetary equivalent, can not and should not be used as currency in the market circulation.
China is one of the world’s biggest and active Bitcoin communities and had a great impact on ICO’s in the last years, whether we’re talking about companies that sell tokens or buyers keen to invest.
We have to wait for new developments to happen. It is unclear if China will allow again ICOs and if it will be regulated in some way. They have left us with one good statement that leads us to a possible regulation drafting that is on the way.
All kinds of financial industry organizations should do a good job of policy interpretation, and urge the member units to consciously resist the illegal financing activities related to the currency issuance financing transactions and the “virtual currency”, away from the market chaos, strengthen investor education and jointly maintain the normal financial order.
Official Source Annoucement: PBC.GOV
Bitcoin Ban Deja Vu from 2013
This event will trigger memories to crypto supporters, as in 2013 China decided to ban exchanges from allowing users to buy Bitcoin or other coins, using the local currency, CNY. The ban was lifted since then, but most of us remember the drop in price Bitcoin suffered after this news came public.
After that moment, China came to senses and lifted the ban allowing people in China to buy again Crypto, using CNY.
It remains to be seen how the latest action of the Chinese government will impact the crypto world especially the companies who were planning to raise money through an ICO and had expectations from Chinese investors.