On Monday, September 4, China’s central bank the People’s Bank of China (PBOC) has proclaimed initial coin offerings (ICOs) illegal and demanded all related fundraising activity to be halted immediately, Bloomberg reports.
According to the local media Caixin the bank has determined that ‘more than 90%’ of ICOs to be in violation of fundraising laws.
Caixin has reported that Chinese regulators have deemed initial coin offerings to be in violation of fundraising laws. Caixin quotes the PBOC representative as saing “the percentage of projects that are actually raising funds for investments is less than 1%”.
According to Caixin’s sources, Chinese authorities will pursue individuals who seek to conduct unlawful initial coin offerings, and that consumers who participate in ICOs may not be the subject of legal recourse.
“This is somewhat in step with, maybe not to the same extent, what we’re starting to see in other jurisdictions — the short story is we all know regulations are coming. China, due to its size and as one of the most speculative IPO markets, needed to take a firmer action,” said Jehan Chu, managing partner at Kenetic Capital Ltd. in Hong Kong, which invests in and advises on token sales.
Caixin reports that the 2017 DACA Blockchain International Summit scheduled for September 2 was “abruptly halted” just one day prior to the commencement of the cryptocurrency event as a consequence of the PBOC’s determinations.
Insider.pro has already reported that the People’s Bank of China was planning to ban ICO’s because of “large risks” to consumers.
The bank was actively assessing possible limits on ICO activities in China, it held a meeting with the country’s Securities and Futures Commission and Banking Regulatory Commission on this matter. They discussed requirements for disclosure of information and more overt warnings about the risks associated with investing into ICOs.