National Internet Finance Association of China(NIFA) on Sept. 13 posted a notice on risk prevention and control of “Virtual Currencies”. On August 30 NIFA released a notice warning investors risks of ICOs and in the next few days, ICOs are defined as illegal fundraising and all ICO tokens are delisted from exchanges. What to expect this time?
The Notice reads:
In recent years, the so-called “virtual currencies”, including Bitcoin, Litecoin, and various forms of tokens, have been traded in a centralized manner on a number of Internet platforms. With an increasing number of participants in virtual currency trading, financial and social risks have accumulated to a level that cannot be ignored. In order to help the public correctly understand virtual currencies such as Bitcoin, discern investment risks, and protect their own rights and interests, we hereby caution investors on the following matters:
The prices of “virtual currencies”, which lack sound valuation basis and are prone to intense market speculation, are highly volatile. Investors who blindly follow market speculation on virtual currencies are highly likely to incur losses. Therefore, investors are advised to enhance their awareness of risks. Furthermore, it is worth noting that “virtual currencies” are increasingly used as a tool in criminal activities such as money laundering, drug trafficking, smuggling, and illegal fundraising. Investors should stay vigilant and report any clues of illegal activities to the authorities immediately.
Investors who engage in speculations on “virtual currency” trading platforms are susceptible to risks related to significant price volatility and security issues. These risks are further compounded by technical risks inherent to the platforms. There have been a number of cases of hacking and theft targeting trading platforms across the world. Investors should bear such risks on their own. In addition, virtual currency trading platforms are increasingly used by criminals to conduct illegal activities, leading to significant legal risks. In recent days, regulatory authorities have suspended the operation of all trading entities engaged in ICO (Initial Coin Offering) activities. So there is no legal basis for platforms which engage in the trading of various forms of “virtual currencies”.
NIFA hereby calls on all member institutions to fulfill their commitment to industry self-regulation, abide by national laws and regulatory rules, refrain from participating in or providing services for any forms of centralized trading of “virtual currencies”, and take the initiative to resist illicit financial activities.
http://news.8btc.com/there-is-no-legal-basis-for-platforms-which-engage-in-the-trading-of-various-forms-of-virtual-currencies
