This week, China started to do a broad crackdown on ICO’s. China’s national bank portrayed ICO’s as “an unapproved illegal public financing behavior,” and has suspended all ICO’s working inside China, and prohibited the act of raising money through token deals.
Chinese media has revealed that the Beijing Operation Management Department of the People’s Bank of China has issued a notice to monetary foundations disallowing the arrangement of money related services to ICOs. The notification expresses that “financial institutions and non-bank payment agencies shall not provide service or the product like account opening, registration, trading, clearing and settlement for token financing and virtual currency”.
This week, China started to do a broad crackdown on ICO’s. China’s national bank portrayed ICO’s as “an unapproved illegal public financing behavior,” and has suspended all ICO’s working inside China, and prohibited the act of raising money through token deals. Chinese authorities have likewise commanded that initial coin offerings working in China give full discounts to Chinese investors.
Bank Accounts Linked to ICO’s will be Monitored
Moreover, the notice requires that banks and financial foundations complete daily monitoring of records related to initial coin offerings “Individual accounts related to ICO platforms must be identified. A Large amount or frequent deposit and withdrawal will be restricted. The immediate restrictive measures should be taken to accounts that are in line with suspicious [anti-money laundering] reporting standards and report to authority timely.”
The reporting requirements are expected to remain in place for years to come, with an unknown source disclosing to Chinese media that “requiring banks and payment agencies to report… will continue for a long time”.
China’s ICO crackdown contains the most aggressive administrative reaction to initial coin offerings up to this point. By contrast, the United States, Canada, Singapore, and Hong Kong have issued explanations communicating a desire to control the issuance of unlicensed securities through ICOs through existing financial authorities, suggesting that the distribution of utility tokens through initial coin offerings won’t go against rules with current monetary directions.
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