Trading News

China Bans ICO’s



The biggest news in the cryptocurrency markets is China’s ban on ICO’s. The markets are already improving, after an initial drop, as news comes out that the ban may not be as harmful as it seems.




 What Are ICO’s?

ICOs are sort of a hybrid between the initial public offerings of the equity markets, crowd-funding and venture capital, allowing start-ups to raise funds for new technology projects, funded entirely in virtual money.

In exchange for money, funders receive the new currency.

ICO’s in China

There were 43 ICO platforms in China as of July 18, according to a report by the National Committee of Experts on the Internet Financial Security Technology. Sixty-five ICO projects had been completed, the committee said, raising 2.6 billion yuan ($398 million), Bloomberg reported.

In July and August alone, the market went boom as China has a habit of doing sometimes. Chinese tech firms raised $766 million worth of crypto-currencies in local ICOs in just 8 weeks, according to Shanghai Security News.





How Many ICO’s

Some $1.78 billion has been raised through ICOs worldwide since 2014, according to data from the CoinDesk ICO tracker. China’s central bank called for the ICO ban on Sept. 4, saying it was an “illegal public finance” mechanism used for  securities issuance and money laundering. Forbes reports Bitcoin prices fell because of China’s ruling, but quickly bounced back to life as of Wednesday.

What the ICO Ban Means

For now, the ban just means Chinese start-ups cannot use an ICO to raise money.

The ICO Ban is Temporary

Hu Bing, a researcher at the Institute of Finance and Banking, a Chinese government-supported academic research organization, claimed that the government’s ban on initial coin offerings (ICOs) is only temporary.

In an interview with CCTV translated by Box Mining, Bing explained that the suspension on ICOs and the government’s declaration of ICOs as an illegal fundraising method are only temporary, until local financial regulators introduce necessary regulatory frameworks and policies for both ICO investors and projects.

Up Next for the China ICO Ban

More importantly, Bing emphasized that the Chinese cryptocurrency community must understand that the government has not “forbidden” ICOs but instead “paused” them, demonstrating the government’s intention to resume ICOs in the near future. Bing also noted that the Chinese government and its financial regulators are currently considering the potential of allowing ICOs to raise money in a controlled environment, through a licensing program.

According to the Coin Telegraph, if the government decides to legalize and regulate the ICO market, its licensing program may structure similarly to the BitLicense program of New York State Department of Financial Services (NYSDF), which requires companies to obtain a license from the state in order to operate and serve people of New York.

The China ban on ICO’s is a small hiccup as governing bodies seek to regulate the cryptocurrency market.



Facebook Comments


Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

About Absolute Currency

At Absolute Currency our mission is to be the best currency news adn information providing a vast array of knowledge, market updates, and resources in the financial markets. Our goal is to be the ultimate one stop destination for anyone that has an interest in or questions regarding currency. We strive to maintain a truthful and unbiased compendium of knowledge, both in content, product reviews and information and more. No buy, sell, or hold recommendations. Past performance does not guarantee future results.
January 2019
« Aug    

Copyright © 2017 Commerza. All Rights Reserved

This copyrighted material may not be republished without express permission. The information presented here is for general educational purposes only.

MATERIAL CONNECTION DISCLOSURE: You should assume that this website has an affiliate relationship and/or another material connection to the persons or businesses mentioned in or linked to from this page and may receive commissions from purchases you make on subsequent web sites. You should not rely solely on information contained in this website or email to evaluate the product or service being endorsed. Always exercise due diligence before purchasing any product or service. This website contains advertisements. If you find reports or news to be in error, contact our support desk with the correct information and proof for us to correct any errors. This website is AS IS and we make no claims nor warranties.

Powered by Commerza.

To Top