The Chinese central bank has just declared that it has brought an effective end to initial coin offerings (ICO’s) as well as bitcoin trading platforms within the country’s borders, after launching a crackdown on fund-raising using cryptocurrencies towards the end of last year.
On the afternoon of 4 September the People’s Bank of China (PBOC) 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, which prohibited any individuals or organisations from engaging in 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.
PBOC is now hailing the success of its ongoing efforts to crackdown on the illicit use of cryptocurrencies in China for fund-raising purposes.
“Since the launch of special rectification (activities), the nationwide scope of operations in breach of regulations has declined by nearly 57%, while a large volume of institutions operating in brach of regulations have withdrawn from the market, and the frequency with which scandals have broken has been effectively contained, said Sun Hui (孙辉), vice-chair of PBOC’s Shanghai office at a press conference held on 7 June.
According to Sun, internet financial risk has been effectively resolved, while the clean-up, rectification and removal of domestic bitcoin trading platforms and ICO’s is “basically complete.”
The Chinese central government’s efforts to combat risk in relation to fintech and online finance first commenced in earnest in April 2016, with the launch of the “Online Financial Risk Special Rectification Work (Plan)” (互联网金融风险专项整治工).
The plan covered third party payments, P2P online lending, equity crowd-funding and online insurance, and was originally scheduled to run for a year long period, but has since been extended until the present.