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Initial Coin Offerings to be outlawed in China

New legislation a blow to the future of crypto-currencies

The global crypto-currency phenomenon has been handed a significant blow after the People's Bank of China (PBoC) outlawed all Initial Coin Offerings (ICOs) in China. 

 

ICOs are the method of raising money by issuing new digital currencies and its Chinese ban could lead to the economic superpower banning all crypto-currency trading. Over $1.5bn has been raised just this year and digital heavyweights, Bitcoin and more recently, Ethereum, have seen huge rises in its market value as a result. 

 

PBoC statement insisted that cyber-currencies that are "not issued by the monetary authorities... do not have legal status equivalent to money, and cannot and should not be circulated as a currency in the market use." 

 

The PBoC continued, "any so-called tokens financing trading platform shall not engage in the exchange of legal currency and tokens."  Suggesting it could ban platforms from "providing pricing, information and intermediary services." 

 

The operations director at trading platform, eToro, in China, Adam Afrima, has claimed the new ruling is a "huge deal" and "bigger than most people think". 

 

Mr Efrima added, "I don't think the Chinese government are against blockchain and high-level blockchain development, I think what they're trying to do is take down scammers. Cryptocurrency related exchanging and trading activities are officially forbidden. If you interpret the law literally then you cannot engage in any crypto exchange — crypto-to-crypto or crypto-to-fiat. What we're seeing in the market is a lot of Chinese people in the market getting scared." 

 

An optimistic Efrima continued, "It's huge. There's not a quality project that's not doing a road show in China right now. An educated guess is that this will be very, very negative. In the long run, it might be good as there'll be less projects and less scams and that could support the price of Ethereum." 

 

Bitcoin, Ethereum and several other crypto-currencies are now available to trade with many of our partners. Visit our homepage for details on the relevant brokers and start trading today.

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