Initial Coin Offering (ICO) is now illegal in China. How do you think Bitcoin reacted? Table of Contents
Cryptocurrency ICO is now illegal in China
China’s central bank sent shockwaves through the cryptocurrency market yesterday, announcing that initial coin offerings – so called ICOs – are illegal.
The PBOC went as far as stating that any fundraising activity must be paused immediately.
It also stated that anyone who has raised money through ICOs must offer refunds.
The People’s Bank of China penalizing violations
China being what it is, the decision didn’t end with words.
The People’s Bank of China also announced it had completed its thorough investigations into ICOs and said it will punish future offerings as well as penalizing violations in ones that have already been completed.
Wait, there’s more though.
The PBOC concluded that trading platforms are no longer allowed to convert the virtual coins with fiat currencies; that banks can’t offer services to ICOs and – wait for it – that digital tokens can no longer be used as currency.
Interestingly though, the bank didn’t mention any specific cryptocurrency by name.
How is the Cryptocurrency market reacting?
Being dubbed a major threat to China’s financial stability is a substantial hit for ICOs.
As we’ve stated in the past, China isn’t just big – it’s huge – which makes its policy decisions more influential than many other nations and economies.
Bitcoin is currently down by over 13% since the beginning of September and other cryptocurrencies are also experiencing volatility.
The US Securities and Exchange Commission has already stated that ICOs could be considered securities, but avoided imposing actual restrictions, at least for now.
What will this decision do to the cryptocurrency market and will it be long lasting or a temporary setback?
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