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  • September 04 03:36
    China Bans Fundraising Through New Cryptocurrency Offerings: Sources

    China is set to begin a regulatory campaign toward the country’s initial coin offerings (ICOs), banning new projects that raise cash or other virtual currencies through cryptocurrencies, and cracking down on related fraudulent practices, a document acquired by Caixin showed.

    Cryptocurrencies are digital currencies that use encryption to regulate and verify the transfer of funds, but are issued independently of a central bank. ICO are a means of raising funds through offering a new cryptocurrency.

    The document -- issued by a central bank-led cross-agency working committee that oversees risk in China's internet finance sector -- defined ICOs as an unauthorized fundraising tool that may involve financial scams and pyramid schemes, and which “severely disrupt the social and economic order.”

    The committee also provided a list of 60 major ICO platforms that local financial regulatory bodies will need to thoroughly inspect and report on.

    At least two major Chinese cryptocurrency exchanges halted ICO operations last week, while a conference discussing blockchain -- the fundamental technology that backs cryptocurrencies -- was shut down over the weekend over concerns of irregularities stemming from ICOs, according to Caixin sources.

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