China’s ICO ban decrypted

Author: | Published: 30 Oct 2017

PRC regulators have recently banned all token financing activity. But the rationale and legal basis behind the ban remains unclear

1 minute read
China’s central bank has banned companies from fundraising using initial coin offerings (ICOs), the first regulator to crack down on the booming token sale market.

A number of issues remain that need to be clarified, however, including the question whether all token financings are criminal offences under PRC law. Another crucial point that needs addressing is the legal status of tokens: are they goods, virtual currencies or something else entirely such as securities or investment schemes? Finally, which regulator is potentially responsible for overseeing ICOs, and how can they deal with cross-border offerings, especially when issuers use foreign websites and social networks?

The initial coin offering (ICO) in China was handed a death sentence on September 4 2017, less than a year after its appearance.

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