China cracks down on cryptocurrency ICOs, while regulators across the globe issue warnings

The People’s Bank of China (PBoC), and six other government departments and ministries related to the Chinese economy, recently announced that Initial Coin Offerings (ICOs) are now illegal in the country.Referring to them as “illegal financial crimes,” the country’s central bank blames ICOs for “disrupting the financial markets” and calls for their immediate nullification.Other departments joining the PBoC in the announcement include the Ministry of Industry and Information Technology, the China Banking Regulatory Commission, the Office of the Central Leading Group for Cyberspace Affairs, the State Administration for Industry and Commerce, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission.Chinese organizations and individuals that have “already completed the ICO process” are instructed to immediately return all investor funds, reversing past ICO fundraising efforts completely. There have already been at least four announcements from recent ICO holders that they will comply, with at least one initiating a funding return process to their investors.“The conducts in ICO like: public offering to over 200 people, no threshold for legal(qualified) investors and illegal bidding transaction, has constituted illegal fundraising, illegal securities activities and illegal financial activities in a disguised form.”-  People’s Bank of ChinaIn order to “protect the investors’ legal rights and interests,” and “prevent the financial crisis,” the PBoC outlined six measures during their announcement to specify how the country is breaking up these now illegal funding vehicles.The first measure is to promote a more accurate understanding within the Chinese government and legal landscape of the nature of ICOs. The Central Bank called for related departments to “monitor any further movement closely, enhance cooperation with the local government, and strictly enforce the law based on the existing system to keep the market stable.”The second measure is an official ban on ICO trading in the country, requiring all types of activities associated with token or digital currency issuance and financing to cease immediately. The Bank called on relevant departments to investigate and deal with both ICO activities “which refuse to stop,” as well as past ICO activities.Exchanging ICO tokens for legal currency and tokens was also banned, and the Central Bank is calling for ICO trading platforms to close down their websites and remove their apps from all mobile app stores. Digital currencies may no longer be “traded or sold by the platform as well as used to provide other services such as pricing,” the PBoC states. A list of 60 ICO-related platforms is provided for local regulators.The Bank suggests that telecommunications authorities shut down offending platforms,  “along with their mobile apps via a letter to the app stores.” It also called on the countries business administration to revoke any licenses ICO companies have “in accordance with the law.”The fourth measure mandated that financial institutions, including non-bank payment companies, refuse to carry out any business related to token financing transactions, “directly or indirectly.” Providing products or services such as “opening, registering, dealing, clearing or settling accounts related to ICO or digital currencies” is now strictly prohibited.Underwriting ICOs and digital currencies was banned as well, and they called on underwriting businesses to report any ICO-related activities that they spot to the appropriate government departments.The fifth measure from the central bank calls on the public to increase their awareness of these risks, and report any suspicious activities. Finally, the bank’s sixth measure calls for “all financial industry players” to "do a good job of policy interpretation,” strengthen investor education, and jointly maintain the “normal financial order.”While the announcement only briefly mentioned Bitcoin and Ethereum, almost every cryptocurrency and digital asset that Brave New Coin tracks dropped in value on the news. In western markets, Bitcoin fell 11% on some exchanges before correcting, despite not being named in the announcement. On Chinese markets, such as OKCoin and BTCC, the damage was worse, with Bitcoin dropping 14% in a shorter period of time. Ether fared worse still, dropping as much as 20%.

 “Initial Coin Offering (ICO) by nature is an unregulated and illegal means of crowdfunding via use of cryptocurrency such as Bitcoin or Ethereum, and it is suspected of being involved in an illegal token sale, securities issuing, crowdfunding, Financial fraud and pyramid schemes.”-  People’s Bank of ChinaWhile China is the most populous country in the world, and has one of the top three most active cryptocurrency investment communities, it is only the latest in a series of countries that have issued rules or warnings about ICOs. In July, the US Securities Exchange Commission (SEC) started the trend by posting a report of their investigation of the infamous June 2016 DAO token sale. 

Read More https://bravenewcoin.com/news/china-cracks-down-on-cryptocurrency-icos-while-regulators-across-the-globe-issue-warnings/