A few days ago, the People's Bank of China finished their investigations about the current ICO's and announced that in the future they will severely punish and take legal action against the coin offerings. They declared that the ICOs are " illegal and disruptive to economic and financial stability". After these news, $35 billion have been withdrawn into fiat currency.
In the first seven months of this year the Chinese ICO market raised about $400 million in funds while support more or less than 65 ICOs. Moreover, in July and August alone the amount was over $750 - fact that triggered the alarm to the Chinese Regulators.
A step like this was necessarily. Right now, more and more ICOs are created and while some might be innovational and trustworthy - others aren't. Upon investigating the ICOs launched on the mainland, about 90% of them turned out to be illegal or fraudulent. As they mentioned, the main reason the ban took place was because of the risks.
The investors have a panchant for chasing quick returns , as Wang Feng said for scmp. While being blinded by the dreams of future earnings, the Chinese forgot about the risks that they're putting with: the fact that their funds will disappear without a trace and the project they invested in wouldn't be born. And even if not, the DAO might happened again.
The announcement had quick effects. More than 40 ICO platforms suspended their business, according to ChinaDaily. And the chinese regulators aren't the only one. The U.S. Securities and Exchange Commission's (SEC) issued a warning regarding token sales . But this doesn't mean that China is against cryptocurrencies. Not at all. While having one of the most performant payment systems in the world - if not the best, China tested the blockchain technology and PBOC announced that they would be the first to issue digital bills, according to CaixinGlobal.
But the sun could shine again in China. According to a interview for CCTV-13, Hu Bing declared that China will look to resume the ICOs in the future. Moreover, he said that this was a "Stop" and not a "Forbidden". The intention was PBOC was not to stop the innovation in the blockchain space, but to protect the investors. In the same interview, there was also a part where a new term appeared : regtech - regulation technology. In order to know which ICOs to approve and to be licensed, the Chinese and not only would need a technology that will separate the risky ICOs from the innovative ones.
So, what else happened due to the Chinese ban on ICOs? Firstly, Binance announced that all the Chinese IP addresses will be restricted. Yunbi delisted 13 cryptocurrencies on 5th September: QTUM, GXS, EOS, ANS, DGD, 1ST, GNT, REP, SNT, OMG, PAY, LUN, VEN. Yuan Li, an investment associate for Heda Ventures, thinks that the fact that ICOs are suspended in China will make Bitcoin and Ether more valuable and ICOs and crowdfunding will have to require KYC/ AML processes - according to an article wrote on LinkedIn. And finally - NEO decided to initiate a refund process due to this news, according to cryptoninjas.
Personally, I believe the story with China banning exchanges is happening again, this time with ICOs. Even if the Bitcoin, Ethereum or any other cryptocurrency price goes down a now - with some regulations concerning the safety - the price will go to the moon in the future. As for the ICOs? I think they will soon find a "regtech" which will make ICOs available in China again.
Stock Photo: Shutterstock
Article with links to prove the facts :
http://usethebitcoin.com/latest-news-about-china-ico-ban/( This is my first article submitted here, Feedback is wanted )
