China announced a crackdown on “ICOs” — issuing of new
Wording of edict makes all cryptocurrency trading
illegal, according to eToro China exec;
Other’s dispute interpretation, as Chinese exchanges
continue to operate.
LONDON — China’s crackdown on “initial coin offerings” may be
much wider than first thought, with the wording of the crackdown
potentially making all cryptocurrency trading illegal.
However, other watchers of the space say the government is not
looking to crackdown on digital currencies like bitcoin and
The People’s Bank of China (PBoC) on Monday
outlawed ICOs, a method of raising money by issuing new
digital currencies. The trend has become hugely popular, with
over $1.5 billion raised using this method in 2017 alone.
the wording of the PBoC edict also suggested that
trading and usage of all cryptocurrencies, including bitcoin,
could now be illegal in China.
The PBoC said that virtual currencies that are “not issued
by the monetary authorities… do not have legal status
equivalent to money, and can not and should not be circulated as
a currency in the market use.”
The PBoC added that “any so-called tokens financing trading
platform shall not engage in the exchange of legal currency and
tokens.” It even goes so far as to ban platforms from
“provid[ing] pricing, information, [and] intermediary services.”
Adam Efrima, the operations director of trading platform eToro in
China, described the ruling as a “huge deal,” saying: “It’s
bigger than most people think it is.”
Efrima, who first alerted Business Insider to the far reaching
nature of the PBoC ruling, said: “I don’t think the Chinese
government are against blockchain and high-level blockchain
development, I think what they’re trying to do is take down
But he added: “Cryptocurrency related exchanging and trading
activities are officially forbidden. If you interpret the
law literally then you cannot engage in any crypto exchange —
crypto-to-crypto or crypto-to-fiat.”
Wong Joon Ian, the cryptocurrency reporter for
Quartz, reports that most Chinese exchanges have
customers on WeChat that bitcoin trading will
continue despite Monday’s ICO ruling.
cnLedger, a Twitter account for cryptocurrency news in China,
also disputes eToro’s interpretation of the ruling.
5/ To clarify, in the notice PBoC used two different notions: Crypto-Currency (BTC, ETH) and Tokens. ICO ban =/= Crypto-Currency ban.
— cnLedger (@cnLedger) September 4, 2017
Charles Hayter, the CEO and founder of CryptoCompare, told
Business Insider: “These are generally left open to
interpretation and a lot of uncertainty reigns in the meantime,
until clarification is given by the authorities.”Efrima told
Business Insider: “What we’re seeing in the market is a lot
of Chinese people in the market getting scared.”
Efrima told Business Insider: “What we’re seeing in the
market is a lot of Chinese people in the market getting scared.”
Efrima said he now expects a regional crackdown on Chinese
operators as municipalities follow the PBoC’s lead and issue
Commenting on the effects the law could have on the global ICO
market, Efrima said: “It’s huge. There’s not a quality project
that’s not doing a road show in China right now. An educated
guess is that this will be very, very negative.”
But he added: “In the long run, it might be good as there’ll be
less projects and less scams and that could support the price of
Separately on Monday South Korea also announced a crackdown on
Business Korea reports that a government task force on Sunday
concluded that “digital currencies cannot be considered money and
currency, nor financial products,” and pledged to “strengthen
levels of punishment,” for ICOs.
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