The People's Bank of China has announced an immediate ban on initial coin offerings and declared them illegal and a threat to financial stability.
In a circular published on its website, the People’s Bank of China (PBOC) said fundraising schemes of this kind had been defined as illegal, and that 90 percent of the initial coin offerings (ICOs) launched in the country were found to have been fraudulent.
«Any form of fundraising through digital currency issuance should be halted immediately,» the PBOC said.
It also warned in the circular, which carried the endorsement of the securities and banking regulators and the task force under the State Council that is responsible for internet finance security, that «Those schemes which are already launched should repatriate funds to investors.»
Never a Currency
The announcement came just a week after the National Internet Finance Association of China, a government-backed industry consortium, warned investors of fraud and illegal behaviour in such fundraising schemes.
ICOs, which allow digital currency start-ups to raise funds through creating and selling digital «tokens», have spread rapidly in China this year.
An adviser to the central bank of China has said Bitcoin can be an asset but will never be a currency.
