Chinese Regulators Turn Against ICOs

Chinese Regulators Turn Against ICOs

Regulators will reportedly inspect 60 major platforms with plans to ban companies from raising money through ICOs.The local media Caixin and CNBC

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Regulators will reportedly inspect 60 major platforms with plans to ban companies from raising money through ICOs.

The local media Caixin and CNBC ( reported that new projects raising cash ot other virtual currencies through cryptocurrenciews will be banned in China. The document released by authorities added that they will crack down on related fraudulent practices.

The notice said that initial coin offerings (ICOs) are an unauthorized fundraising tool that may involve scams, as the local online report noted.

The committee provided a list of 60 ICO platforms to be scrutinized by financial regulators, as CNBC explained.

Companies around the world have received $1.27 billion in the firts half of 2017 though initial coin offerings (ICOs), as a report by Autonomous found as quoted by CNBC in June.

“The crypto economy is growing outside of traditional venues – this has happened before with video game gold farming and virtual economies, but not on such a global scale.”, as the research commented.

“Unfortunately, many ICOs are fraudulent and intended to take advantage of excitement in the ecosystem by leveraging social media for promotion and a lack of enforceable consumer protection, raising legitimate regulatory concerns and attempts by select market participants to self-regulate.”, as the report noted.

Some Chinese ICO platforms have gone out of service. ICOINFO stopped working until the regulators give more clarity on the situation.

BTCC, a Shanghai-based bitcoin exchange platform has also frozed ints ICO-related services, as the publication in CNBC pointed out.

Caixin made clear that authorities shut down a blockchain conference over the weekend. The goal is to prevent ICOs raising funds illegally.

China is not the only country to try to regulate the cryptocurrency space. Regulators in the United States and Singapore have warned citizens against the risks of money laundering and fraud when investing in digital tokens. Yet, some experts warn that regulators tough approach may stifle innovation, according to CNBC`s report.