While there have been multiple postings and interpretations of the the public notice by PBOC, what does it really mean for China investors and the rest of the world? Is Bitcoin banned in China? Have Bitcoin exchanges in China been asked to close? Are ICOs still allowed?
Public Notice of the PBC, CAC, MIIT, SAIC, CBRC, CSRC and CIRC on Preventing Risks of Fundraising through Coin Offering
http://www.pbc.gov.cn/english/130721/3377816/index.html
I. The Essential Attributes of Fundraising Through Coin Offering
This point explains the features of ICO products and that such coin offerings are unauthorized and illegal public fundraising and are suspected of involving in criminal activities such as illegal selling of tokens, illegal issuance of securities, illegal fundraising, financial fraud and pyramid schemes. It refers specifically to funds raised from the exchange of Bitcoin or Ethereum for tokens or "virtual currency". However, Bitcoin, Ethereum and other blockchain based assets are not banned unlike some interpretations.
II. No Organizations or Individuals Shall Engage in Illegal Fundraising through Coin Offering
My take from this is that all forms of fund raising through ICOs are banned for now. Any funds raised through such means should be refunded to investors. Any such offering that defies the ban will be investigated by the local authorities.
III. Management of Related Platforms Shall be Strengthened
Any exchange that is offering currency pairs for such tokens should delist them with immediate effect. No trading platform such offer any service for the exchange, quotation or sale of such tokens. Any website or application offering such services will be investigated by the local authorities and their business license will be revoked.
IV Financial Institutions and Non-Bank Payment Institutions Shall Not Conduct Businesses Related to Coin Offering Fundraising and Trading
Financial institutions, insurers and non-bank lending companies should not associate and should not provide any services related to Coin Offerings such as account opening, registration, trading, clearing and settlement for such fundraising.
V. The Public Need to Stay Aware of the Risks of Coin Offering Fundraising and Trading
Public awareness of risk involved in such unregulated activities. Investors should be fully aware when making investments in such offerings.
VI. Self-regulatory Organizations Shall Exercise Industry Self-Regulation
Companies involved in this space such as financial institutions and exchanges should look to regulate their activities as much as possible.
So to answer the questions :-
Is Bitcoin, Ethereum and other blockchain digital assets banned in China? The short answer is no as China cryprto exchanges continue to expand their Bitcoin and Ethereum currency pairs. Some exchanges such as Yunbi and Binance have take steps to delist China ICOs in line with the official policies.However, it is unclear if NEO, QTUM and several recent ICOs will be banned as well and the quoted prices of NEO and QTUM were down a substantial 20% or more when the announcement was circulated.
Will Bitcoin and crypto exchanges stop operations? No, in fact, exchanges such as Binance and 19800.com are still open for business and Binance has delisted several currency pairs they have also listed new ICOs which are not based in China. They have also increased their KYC checks on this as well.
Will Chinese investors be allowed to participate in ICOs? This is very clearly a NO and many new ICOs have expressly stated that Chinese investors are not allowed to participate.
As a result, Bitcoin and other digital assets have rebounded after a flash crash that resulted in 10% loss but has rebounded somewhat as of the date of this posting.
My personal view shared by my crypto-buddy, Hurricane Harvey, China blockchain assets like NEO and QTUM will thrive if they deliver on their vision and whitepaper, and the recent drop presents another opportunity to join the digital asset revolution.