Bitcoin Forum

There is almost the same topic (https://bitcointalk.org/index.php?topic=2148605.0) but after reading that i realized, that i don't understand the things completely and need to "view the source". I’m mostly a reader, not a writer, but, being woken up by «BTC is below 4000$» application alert, have a strong wish to clarify «Chinese ICO ban question». So, let’s take a closer look:

Disclaimer:
 - i’m not a native Chinese/English speaker and might be wrong in translation and interpretation («what-is-that» parts) of (GT = GoogleTranslate)GT-results, so you should not «blindly rely» on all the following
 - i do use GT-results for citing, so don’t blame me for «google translate english», but it's much better to give "translated source" to all than just "publish an interpretation".

"Executive summary" / TLDR: full ban of fiat<->crypto operations in China + ban of all related (exchanges, trading) activities + big question about mining/miniting (de-legalization/ban ?).

For ones, who are ready to read ... let's go:

The source: http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/3374222/index.html

Let’s attempt to translate and evaluate it step-by-step:


0-1 / The source:


近期，国内通过发行代币形式包括首次代币发行（ICO）进行融资的活动大量涌现，投机炒作盛行，涉嫌从事非法金融活动，严重扰乱了经济金融秩序。为贯彻落实全国金融工作会议精神，保护投资者合法权益，防范化解金融风险，依据《中华人民共和国人民银行法》、《中华人民共和国商业银行法》、《中华人民共和国证券法》、《中华人民共和国网络安全法》、《中华人民共和国电信条例》、《非法金融机构和非法金融业务活动取缔办法》等法律法规，现将有关事项公告如下：

0-2 / Google Translate:

Recently, the domestic through the issuance of tokens, including the first tokens (ICO) financing activities in large numbers, speculation prevails, suspected of engaging in illegal financial activities, seriously disrupted the economic and financial order. In accordance with the Law of the People's Bank of China, the Commercial Bank Law of the People's Republic of China, the Securities Law of the People's Republic of China, the People's Republic of China, the People's Republic of China, the People's Republic of China, the People's Republic of China, the People's Republic of China, the People's Republic of China, the People's Republic of China, the People's Republic of China, the People's Republic of China, The Republic of China Network Security Law, the People's Republic of China Telecommunications Ordinance, "illegal financial institutions and illegal financial business activities," and other laws and regulations, the relevant matters are as follows


0-3 / What is that: this is just a common introduction +«generic references» to law-basis for next-following-statements with an accent on «it’s important to clarify the following». The most important this is the fragment «including the first tokens (ICO) financing activities». So, for ones, who really think that «this is all about ICO’s ban only», it’s not.


1-1 / The source:

一、准确认识代币发行融资活动的本质属性
代币发行融资是指融资主体通过代币的违规发售、流通，向投资者筹集比特币、以太币等所谓“虚拟货币”，本质上是一种未经批准非法公开融资的行为，涉嫌非法发售代币票券、非法发行证券以及非法集资、金融诈骗、传销等违法犯罪活动。有关部门将密切监测有关动态，加强与司法部门和地方政府的工作协同，按照现行工作机制，严格执法，坚决治理市场乱象。发现涉嫌犯罪问题，将移送司法机关。
代币发行融资中使用的代币或“虚拟货币”不由货币当局发行，不具有法偿性与强制性等货币属性，不具有与货币等同的法律地位，不能也不应作为货币在市场上流通使用。


1-2 / Google Translate:

First, an accurate understanding of the essential properties of the custody financing activities
Toll coin financing refers to the financing of the main body through the token of illegal sale, circulation, to investors to raise Bitcoin, currency and other so-called "virtual currency" is essentially a non-approved illegal open financing behavior, suspected of illegal sale Tokens, illegal securities issuance and illegal fund-raising, financial fraud, pyramid schemes and other criminal activities. The relevant departments will closely monitor the dynamics, strengthen cooperation with the judicial departments and local governments, in accordance with the existing working mechanism, strict law enforcement, resolutely control the market chaos. Found suspected criminal problems, will be transferred to the judiciary.
The tokens or "virtual currency" used in coinage financing are not issued by the monetary authorities, do not have legal and monetary properties such as indemnity and coercion, do not have legal status equivalent to money, and can not and should not be circulated as a currency in the market use.


 1-3 /  What is that: the most scary things, of course, are:
  - «Found suspected criminal problems, will be transferred to the judiciary»
  - «The tokens or "virtual currency" used in coinage financing … can not and should not be circulated as a currency in the market use»
     My evaluation: only a header «an accurate understanding of the essential properties…» stops me from interpreting this as «formal de-legalization/criminalization» of all fiat<->crypto processes



2-1 / The source:
   
二、任何组织和个人不得非法从事代币发行融资活动
本公告发布之日起，各类代币发行融资活动应当立即停止。已完成代币发行融资的组织和个人应当做出清退等安排，合理保护投资者权益，妥善处置风险。有关部门将依法严肃查处拒不停止的代币发行融资活动以及已完成的代币发行融资项目中的违法违规行为。

 2-2 / Google Translate:

2. No organization or individual may engage in unauthorized custody financing activities
As of the date of this announcement, all types of currency issuance financing activities shall cease immediately. The organizations and individuals who have completed the financing of the tokens should make arrangements for repatriation and so on, reasonably protect the interests of investors and properly handle the risks. The relevant departments will seriously investigate and deal with non-stop tokens issued financing activities and the completion of the tokens issued financing projects in the illegal acts.

2-3 /  What is that: Hard to say, need a good expert with a Chinese laws knowledge and practice. The most scary question is about clarification of term «all types of currency issuance financing activities» (各类代币发行融资活动 = «Various types of tokens issued financing activities»). As i understand, «mining bitcoins» COULD be considered as «currency issuance financing activities». And in fact, any PoS-issuing too, but if in case of PoW you could try somehow (…how?) to stop/slowdown the process, but what to do with PoS ?

3-1 / The source:

三、加强代币融资交易平台的管理
本公告发布之日起，任何所谓的代币融资交易平台不得从事法定货币与代币、“虚拟货币”相互之间的兑换业务，不得买卖或作为中央对手方买卖代币或“虚拟货币”，不得为代币或“虚拟货币”提供定价、信息中介等服务。
对于存在违法违规问题的代币融资交易平台，金融管理部门将提请电信主管部门依法关闭其网站平台及移动APP，提请网信部门对移动APP在应用商店做下架处置，并提请工商管理部门依法吊销其营业执照。

3-2 / Google Translate:

Third, strengthen the management of tokens financing trading platform
As at the date of this announcement, any so-called tokens financing trading platform shall not engage in the exchange of legal currency and tokens, "virtual currency", and may not be traded or sold as a central counterparty to sell tokens or "virtual currency" Not for the tokens or "virtual currency" to provide pricing, information services and other services.
For the existence of illegal problems on behalf of the coin-financing trading platform, the financial management department will be submitted to the telecommunications authorities in accordance with the law to close their website platform and mobile APP, to the network letter to the mobile APP in the application store to do the next frame disposal, and to the business administration Revoke its business license.

3-3 / What is that: Looks like total ban of all exchanges in Chinese jurisdiction. Am i wrong ?

4-1 / The source:

四、各金融机构和非银行支付机构不得开展与代币发行融资交易相关的业务
各金融机构和非银行支付机构不得直接或间接为代币发行融资和“虚拟货币”提供账户开立、登记、交易、清算、结算等产品或服务，不得承保与代币和“虚拟货币”相关的保险业务或将代币和“虚拟货币”纳入保险责任范围。金融机构和非银行支付机构发现代币发行融资交易违法违规线索的，应当及时向有关部门报告。

4-2 / Google Translate:

4. Financial institutions and non-bank payment institutions shall not carry out business related to tokens financing transactions
Financial institutions and non-bank payment agencies may not directly or indirectly provide financing and "virtual currency" to provide account opening, registration, trading, liquidation, settlement and other products or services, shall not be covered and tokens and "virtual currency" Of the insurance business or the tokens and "virtual currency" into the scope of insurance liability. Financial institutions and non-bank payment agencies found that the currency issuance of financing transactions illegal clues should be promptly reported to the relevant departments.

4-3 / What is that: Looks like a fiat<->crypto operations ban for ALL financial organizations in China. Should we wait mass-crypto2fiat-sales on exchanges that are not in Chinese jurisdiction ? Don’t we see it now?

5-1 / The source:
五、社会公众应当高度警惕代币发行融资与交易的风险隐患
代币发行融资与交易存在多重风险，包括虚假资产风险、经营失败风险、投资炒作风险等，投资者须自行承担投资风险，希望广大投资者谨防上当受骗。
对各类使用“币”的名称开展的非法金融活动，社会公众应当强化风险防范意识和识别能力，及时举报相关违法违规线索。

5-2 / Google Translate:

Fifth, the public should be highly alert to the risk of currency issuance financing and trading risks
There are multiple risks in the issuance of coins and transactions, including false asset risk, risk of business failure, and risk of investment speculation. Investors are required to bear the risk of investment. We hope that the majority of investors will be deceived.
The use of the "currency" of the various types of illegal financial activities, the public should strengthen the risk prevention awareness and recognition ability, timely reporting of relevant illegal clues.

5-3 / What is that: «water is liquid», «sun is yellow», this part is interesting only for ones, who know nothing about crypto.


6-1 / The source:
六、充分发挥行业组织的自律作用
各类金融行业组织应当做好政策解读，督促会员单位自觉抵制与代币发行融资交易及“虚拟货币”相关的非法金融活动，远离市场乱象，加强投资者教育，共同维护正常的金融秩序。

6-2 / Google Translate:
Sixth, give full play to the role of industry organizations self-discipline
All kinds of financial industry organizations should do a good job of policy interpretation, and urge the member units to consciously resist the illegal financing activities related to the currency issuance financing transactions and the "virtual currency", away from the market chaos, strengthen investor education and jointly maintain the normal financial order.

6-3 / What is that: some kind of «message» to financial organizations covered by «all financial organizations should fight against all the bad for all the good». Many possible interpretations, but not too much practical output.

Any comments and/or corrections are appreciated.

translation...
standard finance warning about running a Fiat using money service business without a licence
and the risks of investors putting money into such things

ICO has always been a shady thing and in many jurisdictions it has always been illegal to do. China is now just catching up with the rest of the world.... like always....

you are reading up too much into a normal thing and making in big in your head.

You pointed that out in one sentence. There is nothing to worry about. It doesn't remain to bitcoin or well known cryptocurrencies.
It is like the thing with the oil pricrs or shares. There is sone "news" and all panic, price is falling until shareholders are aware how the real facts are.

I totally aggree with you.
ICOs are an awesome idea for project developers,but from investors point of view,it`s kinda shady.
What is an ICO?
Project devs say,"Dive us your coins to fund our AWESOME project,and we will give you tokens."
But what if there are no crypto exchange platforms that would want to accept those tokens.
Their value would be zero,or close to zero.

ICO-issued tokens are dead and will be illegal to trade in every country eventually (the countries that have warned are piling up).

The tokens that were issued by proof-of-work are still legal, so no problem for Bitcoin, Bitcoin Cash, Litecoin, and Monero. Expect these coins to recover as ICO-issued tokens are sold off and these legal coins are purchased.

Dash, Bytecoin, and Steem are obfuscated ICO-issued tokens and thus could become illegal to use and trade as well.

More details (https://bitcointalk.org/index.php?topic=2149763.msg21523935#msg21523935).


Existing ICO-issued tokens will become illegal, because investment securities are illegal to exchange if not on a registered exchange. And illegally issued investment securities are never legal to trade.

Thus ICO-issued tokens can not be spent decentralized. They are useless because can’t function as a cryptocurrency. At least not legally.

I've read some similar news about this (china and their regulations) - and this is make me bored - But I always thought this is a natural thing and didn't make a big problem. We must remember that cryptocurrency is not only for China.

What you are saying is true this all are the tactics to bring down the bitcoin price so that the chineses big whales who are in short position wanted to cover it and then they will pump the price. Same thing happen last time when china banned bitcoin transaction in exchanges but after some days they restarted and the impact was not that much as now apart from china other country users are more activerly working on bitcoin and on any decline of price they are taking as buying opportunity within this week end we will see the price moving up.

China, Russia, South Korea, and Singapore have all announced an intent to crackdown and punish ICOs.

SEC has also warned and will presumably take enforcement action soon.

The contagion of nations that will do enforcement is piling up. The other major nations will not stand by and be embarrassed. They will presumably also enforce.

This only affects ICO-issued tokens. Those tokens which were honestly issued by proof-of-work are unaffected and remain legal.

? "As of the date of this announcement, all types of currency issuance financing activities shall cease immediately"
There is a good benchmark: imagine, that SEC or FED published the same statement. What's next ?
In a "wide meaning" PoW/PoS/Po-anything-you-want is a "currency issuance financing activities"

All i want to say is that formally it looks like a "full ban", but probably:
  - there is a vary narrow treatment of "currency issuance financing activities" term which relates only to ICO-"issued" tokens by PBC
  - there is a translation issue and native chinese speakers (or law experts) could clarify it
 

Meanwhile I am busy looking for more fiat to catch all those coins they are throwing in the market. Shall I include my rent and grocery money?

OP, do not worry about such things. The government will always try to control everything. What we have to do now is to keep buying the dips now and be rich later. We have the panic sellers to thank for this opportunity.

Incorrect (https://bitcointalk.org/index.php?topic=1558366.msg21515894#msg21515894).

In proof-of-work, no one is the issuer. Click the link (https://bitcointalk.org/index.php?topic=1558366.msg21515894#msg21515894) to understand why.

1. "This only affects ICO-issued tokens."
2. "Those tokens which were honestly issued by proof-of-work are unaffected and remain legal." (... to many statements in one sentence)

No offends, but can you reasonably (i.e. referring to laws & practice) prove this statements or this is just an your opinion against PBC public statement?

It was all explained in great detail (https://steemit.com/cryptocurrency/@anonymint/are-most-cryptocurrencies-doomed-to-collapse-because-they-re-ico-issued) 2 days before the collapse.

Everything that is happening was predicted in advance.

Here is another summary (https://bitcointalk.org/index.php?topic=2145300.msg21521472#msg21521472).

Agreed on the bold one, but we must also remember that China also one of the biggest bitcoin or cryptocurrency user too. If China really banned crypto i can't imagine how red the price of all cryptocoin, that must be a big swing happened. Any Chinese people here can translate that news properly to us ?

ok, i briefly got about SEC (and ICO-related tokens, referred settmit post is good), but Howey's Test (https://en.wikipedia.org/wiki/SEC_v._W._J._Howey_Co.) for PoW/PoS-mined crypto (BTC,LTC, any other) is not an argument, at least, for PBC. And i still didn't get about "no issuer" in BTC: mining is still mining, block reward is still block reward, block finder is still block finder (even if it's a pool). So we have a currency issue activity, and the PBC statement:

"As of the date of this announcement, all types of currency issuance financing activities shall cease immediately"

The third part of initial post "Executive summary / TLDR" is QUESTION about mining/minting ban in China. And there is no clear answer yet.

It's really important because of China also one of the biggest bitcoin or cryptocurrency user too.
So i would like to join and ask: is there any native chinese speaker (awesome if with money-laws-in-china background) who can clarify this text ?

China will follow the same basic principle which is designed to protect investors from issuers who make wild claims and then issue tokens and sell them. That is what the recent action is about in many countries.

All the securities regulators from the G20 nations have been coordinating with the SEC on this. That is why all these actions are coming at the same time from many nations.


Did you read at the link that was provided?


If you think China is going to ban mining, when they are the #1 in mining, what are you smoking?

China’s statement is about the risk for investors when a centralized issuer is making claims and issuing tokens, i.e. ICOs.

Their statement has nothing to do with mining, for the reasons stated at the link above.

This will all be clarified and the proof-of-work coins will recover. The ICO-issued coins are doomed, because suddenly many countries are making these enforcements against ICOs and will not allow exchanges to trade already illegally ICO-issued tokens (same as what China has announced).

But since even legally issued ICO tokens (i.e. they will have to be registered and have strict disclosures and restrictions on trading) will not be legal to trade except on registered exchanges, then they will be illegal to use as cryptocurrencies, which by definition are spent (traded) decentralized. Thus ICO-issued cryptocurrencies are dead.

Do you include Ethereum in this assessment? Technically, Ethereum was an ICO. The funds were raised in BTC and investors were compensated with ETH tokens from the genesis block. Thereafter, though, ETH has only been created by mining.

I imagine that if the Ethereum ICO were happening today, it would be covered by the PBOC's new prohibition. The founders are probably lucky they got in on the ICO craze so early, though. I doubt they plan to ban ETH...

I don't know about that, but maybe you can hit this one : https://bitcointalk.org/index.php?topic=2150624.0
He is one of Chinese people who don't believe in government policy, and he says the China's government never do something permanent.

ICOs have been abused and thanks to developers who are only concerned by their pockets all they do is have a nice graphics then create a token or a coin based on the existing platforms and also investors too blinded by their own selfish interest of looking for when it will be listed so that they will make abnormal profit in as much as I am not happy about this, because it affects the entire crypto industry as well as the legitimate ICOs with plan to solve a problem, government of China have said its own and the rest is on us the active participants on how we react to it.

The legality of competitively proof-of-work mined coins are not at all afflicted by recent events.

So prior rulings about the legality of Bitcoin are irrelevant to the issue about ICOs.

The difference compared to prior Chinese regulatory actions, is that this appears to have been a coordinated event amongst regulators in many nations.

And the ETH ICO madness was entirely out-of-control and risking naive investors’ funds in a plethora of scams. It became a new Xerox copy ICO every day scam. The nations had no choice but to act. And surely the SEC and other nations will follow. I think Asia acted first because their governments are less democratic and more authoritarian, so they can act quicker. The democratic nations will follow because their regulators have the same responsibility to their citizens. The wheels just move slower in the democratic nations. Asia is finely oil machine that is more efficient than the West now.

The issue is not exclusive to China. China, Canada (https://bitcointalk.org/index.php?topic=2127850.0), Russia, South Korea, and Singapore have warned about coming enforcement action. The SEC already recently warned in the context of The DAO. Obviously the recent events are coordinated between regulators in all these nations including probably the SEC.

Click here for a longer explanation (https://bitcointalk.org/index.php?topic=1558366.msg21515894#msg21515894) of why proof-of-work mined tokens are not investment securities and thus not afflicted by recent events.

The above link also discusses Ethereum’s ETH, Ethereum ICOs, and others.

It is also very important to note that pre-existing ICO-issued tokens, are illegal to trade and can be delisted from exchanges. Your home country can make it illegal for you to trade them. The above link explains this is more detail.

Please stop spreading the incorrect information, implying that ICOs will come back or that pre-existing ICOs can still be traded. Most people do not want to go to jail or suffer fines. Even if they regulate ICOs, these will only be tradeable on registered exchanges and will not be spendable as cryptocurrencies (i.e. not allowed to be traded decentralized). Thus these new regulated ICOs will not be very useful. It will not be the same.

Many shady exchanges and their largest traders are likely to suffer fines and threats of criminal prosecutions. Today is only the beginning of a massive global crackdown. The gears may move somewhat slowly but over the coming year there will be massive changes to the crypto ecosystem. All the hard-headed will have their fingertips burned up to their armpits as necessary for authorities to stop the rapid proliferation of investment securities scams.


There will be no greater fools to sell the ICOs to, when they are not legal.

The ICO scam model depends on selling to newbies who come in and believe these 100s of Xerox copy ICOs each have a chance to become the next Bitcoin or Ethereum.

Nobody is going to speculate on illegal ICOs, because there will be no mass market for them, thus no way to hype them.

And it is not just USA and China that are banning ICOs. Same as was the case for FATCA (a USA only law), it became enforced in every country in the world, because the USA threatened to penalize every nation that did not comply.

We’ve already got Canada (https://bitcointalk.org/index.php?topic=2127850.0), Russia, China, Singapore, South Korea, and the USA warning about ICOs.

You’d have to be blind to argue this is not a critical mass.

I am dizzy reading the the original post and I realize that this is the side-effect when we are dealing with a country like China...there is so much in there that can sometimes be beyond comprehension for guys who are not in China or who are not educated on their way of life or culture.

We have already seen how the China Effect can affect the whole cryptocurrency market but soon this can be the thing of the past if we allow new big markets to open up. The bigger is the market the lesser is the power and influence of China, that is for sure. As of now, we are still under its magical power so anything they say, they do and they don't do in relation to cryptocurrency can have ramifications in the market and we are all affected.

I am predicting though that soon China will come up with their own strict rules and regulations on ICO projects and one has to pass the rigid tests before they can do business in China and offer coin/token to anyone interested. They just want a total stop for now so they can have the time to sort things out. Be ready for China to get back with a big revenge in the world of crowdfunding.

China like the US and other governments must find ways to incorporate the vast potential of the blockchain revolution. It is the evolution from the trusted third party system, that has been part of the traditional basis for transactions, to a global system of equal participation.

A dificult situaton with btc ethereum ... are be only to half november,  all (10 alt coin in world rank index will be to high) . china traider looked for ideas for working !

There is a big possibility that due to some lobbying from interested and big names in China, it might later on change its mind on ICO and would come up with a rigid regulations covering the said platform. I am sure that China would not want to be left behind with cryptocurrency maybe they just need to time to adjust and tweak everything. This is an optimistic view of things. The pessimistic view is that China has its own global agenda and cryptocurrency has no part on that vision.

so how soon do we also expect Bitcoin Price to rise up to at least 5000USD this year???

It's hard to say. The Chinese government is known for its cryptic pronouncements, as well as for its waffling -- anyone remember when China was going to ban Bitcoin ~3 years ago?

According to at least one Chinese official, even the ICO ban is just temporary: https://twitter.com/sytaylor/status/905867039935430656

So I wouldn't worry too much about their stance towards cryptocurrencies in general. I think they just wanted to calm the market down while they mull over regulations.

old story repeats itself. there are many people do not like Bitcoin. if anyone knows jp Morgan, would know the controversy he made, he said he did not like cryptocurrency but he turned out to invest in ZCASH.

ICO is not the key to victory for Bitcoin. ICO is just a facility to add new coins in crypto. All countries are doing it, and this is a sign that belief in crypto is real.
If China forbids ICO, then this is a big problem for the freedom of crypto in China.
I do not care about China, just so many people panicked so BTC haga depressed.
This world does not belong to China.

with the prohibition of ico in the country, there must be a background that is the reason the government did it. all done to protect his people from irresponsible parties.