China bans ICOs as part of their fight against cryptocurrency
The ruling comes from China’s central bank, which issued a statement criticizing ICOs for “disrupting” the country’s financial order. The regulator described initial coin offerings as “a form of unapproved illegal public financing” that “raises suspicions” of fraud and criminal activity, reports the Financial Times. Although the valuation of bitcoin fell in response to the news, the regulation does not directly target the popular cryptocurrency.
In the past year, there has been a boom in ICOs, driven in part by the soaring value of more established cryptocurrencies. While projects like Bitcoin aim to offer an alternative to state-backed currencies, ICOs often have narrower and more gimmicky uses.
If investment in ICOs constitutes a bubble, though, it hasn’t burst yet. It’s estimated that coin offerings have raised $1.6 billion in 2017 alone, with 65 launches in China totaling some 2.6 billion yuan or $398 million (according to a report from the National Committee of Experts on the Internet Financial Security Technology). This rush of money is why the technology has invited the wrath of Chinese regulators, who are enforcing the government’s orders to make “financial security” a top priority.
Read more at theverge.com
