Initial Coin Offering (ICO) is now illegal in China. How do you think Bitcoin reacted?

Cryptocurrency ICO is now illegal in China

China’s central bank sent shockwaves through the cryptocurrency market yesterday, announcing that initial coin offerings – so called ICOs – are illegal.

The PBOC went as far as stating that any fundraising activity must be paused immediately.

It also stated that anyone who has raised money through ICOs must offer refunds.

Article: China banning Cryptocurrency Mining

The People’s Bank of China penalizing violations

China being what it is, the decision didn’t end with words.

The People’s Bank of China also announced it had completed its thorough investigations into ICOs and said it will punish future offerings as well as penalizing violations in ones that have already been completed.

Wait, there’s more though.

The PBOC concluded that trading platforms are no longer allowed to convert the virtual coins with fiat currencies; that banks can’t offer services to ICOs and – wait for it – that digital tokens can no longer be used as currency.

Interestingly though, the bank didn’t mention any specific cryptocurrency by name.

Invest in Cryptocurrency market online

How is the Cryptocurrency market reacting?

Being dubbed a major threat to China’s financial stability is a substantial hit for ICOs.

As we’ve stated in the past, China isn’t just big – it’s huge – which makes its policy decisions more influential than many other nations and economies.

Bitcoin is currently down by over 13% since the beginning of September and other cryptocurrencies are also experiencing volatility.

The US Securities and Exchange Commission has already stated that ICOs could be considered securities, but avoided imposing actual restrictions, at least for now.

What will this decision do to the cryptocurrency market and will it be long lasting or a temporary setback?

Remember, at iFOREX you can trade Bitcoin CFDs – as well as over 420 other CFD instruments – and can always choose to short or long your position, potentially taking advantage of price changes in any direction.

Visit iFOREX Official Website

Posted by Maria Sanchez

• Maria Sanchez's Twitter Account
• Maria Sanchez's Latest Articles

Author Profile

Maria is an expert of financial markets, bringing all the information from English to Spanish for a better understanding of the online traders. She is also a day trader with experience in developing trading strategies that generate profit while minimizing risk and working under high pressured environment. While being a portfolio manager by herself, she focuses on marketing and consultancy of financial and Insurance products.