Central Bank Places Accounts of ICO Platforms Under Strict Supervision


Following the launch of a ban on initial coin operations in China, the central bank has required that the accounts of certain ICO platforms be subject to strict control measures in order to prevent owners from absconding with funds.

On the afternoon of 4 September the People’s Bank of China issued the “Public Notice Concerning the Prevention of Cryptocurrency Issuance Financial Risk” (关于防范代币发行融资风险的公告) in conjunction with six other central government departments, prohibiting individuals or organisations from engaging in any further ICO’s.

The public announcement released by PBOC called for the immediate suspension of all cryptocurrency financial activities, as well as for individuals and organisations that have raised funds via cryptocurrency issuance to make arrangements for repayments to investors.

In addition to the ban on ICO’s, the Chinese central bank has also ordered that Beijing banks and their branch entities place ICO-affiliated accounts under a set of strict controls and restrictions.

According to ThePaper.cn Beijing banks are now required to thoroughly screen any personal bank accounts associated with a list of 60 ICO exchange platforms released by the Internet Financial Risk Special Rectification Work Leadership Team Office (互联网金融风险专项整治工作领导小组办公室) over the weekend.

The banks must “immediately adopt appropriate control measures” in order to forestall the risk of funds disappearing, and subject such accounts to restrictions on large-sum or high frequency transactions that satisfy the requirements of anti-money laundering policies, as well as suspend all related settlement and payment services.

The Beijing authorities have further required that financial institutions provides reports on these accounts before 9 o’clock each morning on their balances and transactions for the previous day, and provide timely reports on any bank or payment accounts that are suspected of involvement in ICO transactions.

One source close to regulators in Beijing said ThePaper.cn to that that administrative work  required of banks in relation to ICO platforms has only just begun, and can be expected to continue for some time ahead.

“Current rectifications have only just commenced, with work in relation to data submissions required of banks and payment organisations set to continue for a very long time,” the source said.

Other sources said to Yicai that China’s ban on ICO’s is just the start of a broader crackdown on virtual currencies and other Fintech activities, with a string of related policies expected to follow in its wake.