China bans initial digital coin offerings

The People’s Bank of China has banned all sales and currency conversions involving digital tokens, and prohibited all financial institutions and non-bank payment organisations from offering any services to initial coin offerings (ICOs) which they say are now illegal.

In a statement, the People’s Bank of China said that ICOs are a form of unauthorised and illegal public financing, and that ICOS have seriously disrupted economic and financial order. “The tokens or “virtual currency” used in coinage financing are not issued by the monetary authorities, do not have legal and monetary properties such as indemnity and coercion, do not have legal status equivalent to money, and can not and should not be circulated as a currency.”

They also added that “Financial institutions and non-bank payment institutions shall not carry out business related to tokens financing transactions.”

As a result, Bitcoin was down by 11 percent, while ethereum dropped more than 16 percent.

 

September 5th, 2017 by