The People’s Bank of China (PBoC) which is the central bank of the People's Republic of China engaged for carrying out monetary policy and regulation of financial institutions in mainland China, has recently rectified their laws by issuing a new warning concerning the investment in initial coin offering and cryptocurrencies after the citizens were found to bypass the legal barriers.
The notice issued contained a reminder for the illegality of the ICO fundraising model and stated, "suspected of illegally selling tokens, illegally issuing securities, illegal criminal activities, financial fraud, pyramid schemes and other illegal and criminal activities.”
The notice also had a gist of the successfulness of the ban which resulted in the reduction of Yuan trading volume to under 1% of the global trading volume. The central bank, throwing light on its recent ban on ICO, said “The global share of domestic virtual currency transactions has dropped from the initial 90% to less than 5%, effectively avoiding the virtual currency bubble caused by skyrocketing global virtual currency prices in the second half of last year in China’s financial market. The impact has been highly recognized by the community.”
The government has shut down almost 88 ICO trading platform, and 85 ICO projects were operating in the country but Chinese investors are still finding methods to circumvent the ban by using Virtual Private Networks (VPNs) and offshore exchanges with constantly changing domain names.
The bank has stated their new methods of restricting the ICO industry have been a success and the also blocked 124 IP addresses, and have closed 3,000 accounts as a result of their increased oversight. The central bank, during the early stage of the ban, stated last year that “As of the date of this announcement, all types of token issuance financing activities shall cease immediately. The organizations and individuals who have completed the financing of tokens should make arrangements for repatriation and so on, reasonably protect the interests and properly handle the risks.”
Chinese companies are also working to put down the crypto and ICO operations by communicating with the investors through their platforms. WeChat and Tencent, have been the prominent platforms that have censored much news related to cryptocurrency and peer-to-peer crypto exchanges.
The Chinese government is strict towards the regulations on cryptocurrencies, and it is unclear what would be their further actions to stop the illegal activities.