China Bans Initial Coin Offerings as Illegal Fundraising

Regulators in China have banned all initial public coin offerings (ICOs) pending a review and the possible introduction of regulations to control the booming market.

News that China was considering banning ICOs emerged last week when it was reported that China’s Securities and Futures Commission, the China Banking Regulatory Commission and other regulators had met and were considering a ban on all ICOs until concerns about risks were addressed.

The prices of Bitcoin, Ethereum, and other largest cryptocurrencies, slumped after the announcement.

As SiliconAngle reports, the decision to ban ICOs came into force over the weekend. A top-level ICO conference scheduled to be held in Beijing was canceled and major ICO trading platforms were informed by regulators that all ICOs are now officially banned because they were involved in “illegal money raising.”

Notably, individuals and organizations that have completed ICO fundraisings should make arrangements to return funds, said a joint statement from the People’s Bank of China, the securities and banking regulators and other government departments, that was posted on the central bank’s website.

Among those confirmed as complying with the ban is bitcoin exchange BTCChina, which according to local media only launched support for ICOs last week. Another ICO exchange, called ICOINFO, ceased trading last week ahead of the introduction of the ban.

In a separate report, Asia Times claimed on Monday that along with the immediate ban of all ICOs in the country, China’s “Remediation Office of Risks in Internet Finance” has ordered that all ICOs in the country be investigated by local regulatory authorities.

The National Internet Finance Association of China had previously issued a warning to investors that some ICOs are using “misleading propaganda” to promote financing activities, that the fundraising activities are taking place without regulatory approval, and that some of those ICOs are suspected of being involved in fraud, the sales of illegal securities, illegal fundraising and other acts.