China bans ICOs and is preparing …
China bans ICOs and prepares for large-scale investigation
Last week, we released some disturbing news about the tightening of ICO controls in China. The latest report from the news outlet Caixin was confirmed: China has officially banned the raising of funds by organizations and individuals through the initial placement of tokens and the launch of their own cryptocurrencies, calling this practice “illegal financing”.
Individuals and organizations that have already successfully completed ICOs are required to return funds to investors, Business Insider reports, citing a joint statement by the People’s Bank of China, banking and securities regulators and other government agencies, which was published on the bank’s website..
Bitcoin and Ethereum rates reacted to this news and went down. However, as one would expect, NEO, which was previously called Chinese Ethereum, suffered the most: the cryptocurrency lost about 32% in the last 24 hours..
Zennon Capron, director of Shanghai-based fintech consultancy Kapronasia, says he envisioned regulators would impose a ban on ICOs to better understand the phenomenon and could weaken it in the future..
“Regulators around the world are trying to figure out what an ICO is, what risks they carry and how to regulate them,” he said..
“In this respect, China is no different from the United States or Singapore. They say, “Okay, we need to hold them back until we figure out what’s what.” I think this is a temporary measure. “.
ICO popularity in China has increased significantly this year.
In July, state-run news agency Xinhua cited data from a government financial monitoring organization. According to him, 65 successful ICOs were carried out, which raised 2.62 billion yuan ($ 394.6 million). They were attended by 105,000 investors from China.
The reaction of netizens was immediate.
“The music didn’t play for long,” writes a member of the chat group of the popular social platform WeChat, where users could discuss the ICO of the SelfSell fundraising platform, which was scheduled for next week..
“Hurry up to sell your bitcoins,” another user writes..
The organizer of the ICO, who visited 6 cities in order to promote his project, reports that the campaign has been suspended.
Capron Says New Rules Does Not Affect Chinese Investors Who Can Still Invest In Offshore ICOs.
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