News outlets report possible ICO ban in China
Chinese regulators intend to ban Initial Token Offering (ICO) campaigns, a popular funding method in the cryptocurrency space, with help which startups have already raised more than $ 1.8 billion. writes this CoinDesk.
According to a report by the news outlet Caixin, regulators have decided that ICOs violate the provisions of laws governing fundraising in China, however, an official statement has not yet been released..
Against the backdrop of this news, the ICO conference, which was supposed to be held in Beijing on September 2, was canceled..
This decision is important because recent times regulators in many countries of the world began to take an interest in ICOs and began to develop an appropriate regulatory framework, and the decisions of the People’s Bank of China, which is the central bank countries and the financial regulator are traditionally used as a starting point in other jurisdictions.
Caixin refers to an anonymous source and reports that the People’s Bank of China conducted a study of ICOs, as a result of which he came to the conclusion that many of them are associated with illegal financial activities..
“More than 90% of ICO projects may violate the provisions of the laws on illegal financing or anti-financing fraud. The percentage of projects that actually attract financing as investments is less than 1% “.
In addition, the publication notes that the authorities and professional lawyers have come to the conclusion that many ICOs are simply “hiding behind a mask of legitimacy,” while under it there are illegal financing schemes..
Caixin notes that even if ICOs are not suspected of illegal funding, they can still violate the provisions of the anti-fraud law..
“Banning ICOs will help catch the main sheep in the herd, wherein there may be some exceptions for people simply following the herd, ”the source writes.
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