China bans initial coin offerings calling them ‘illegal fundraising’
China bans initial coin offerings calling them ‘illegal fundraising’: Chinese regulators have launched a crackdown on individuals and firms raising funds by offering their own digital currencies. The People’s Bank of China has declared initial coin offerings (ICOs) illegal and wants them to “cease immediately”.
A growing number of tech companies are opting to sell digital “tokens” because they are quick, easy and unregulated.
The ban saw sharp falls in the two leading crypto-currencies, with bitcoin tumbling $200 on Monday.
Issuing ICOs – a relatively new phenomenon – has become popular in China, with close to $395m (£305m) raised from investors this year, according to data from Chinese state news agency Xinhua.
But it is part of a growing global trend. The research site CoinDesk suggests more than $1.5bn in capital has been raised through ICOs since the start of the year. That’s up $256m from last year.
As part of the ban, Chinese authorities have called on individuals and organisations to refund investors for any amount raised through ICOs.
The move is aimed at protecting investors and “dealing with the risks properly”, said a joint statement from the People’s Bank of China, securities and banking regulators and other government departments issued on Monday.
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