China Cracks Down on ICO Activity as Blockchain Conferences Cancel
The Chinese government is reportedly cracking down on ICO activity. The policy shift will likely see several token sales in China suspended, at least for the immediate future.
Local industry sources told Bitsonline financial authorities had been observing ICO (initial coin offering) activity for some time. However until recently there was no sign they intended to intervene or prevent it.
Blockchain Conferences Canceled
Organizers of the 2017 DACA Blockchain International Summit Forum, scheduled to begin at the Beijing Renaissance Hotel on 2nd September, have “temporarily” canceled the event.
DACA (Distributed Autonomous Coalition Asia) was holding the event in conjunction with the municipal government of Wuhai City in Inner Mongolia.
The official reason for the DACA event cancellation was public safety concerns. Ticket sales exceeded expectations and venue space was limited, they said. It warned participants of rumors surrounding the event and hinted at legal action against anyone spreading false information.
On 22nd August, we reported Shanghai local business authorities had interrupted and closed the Finwise 2017 Global Blockchain Summit. At that time, observers believed it to be a misunderstanding, and not indicative of a wider campaign.
Now, blockchain industry participants in China are wondering if it might be, after all.
People’s Bank Says ICO Projects Are Illegal Fund-Raising
Business news service Caixin reported that authorities had become concerned at the rapidly heating ICO market in China.
Authorities had taken a more moderate view of ICOs over the past two years, Caixin said. However on 21st August the central bank received an emergency report warning ICOs constituted a form of illegal fund-raising.
Central bank stakeholders studied “a large number of ICO white papers” and concluded that 90 percent of ICOs could be suspected of illegal fund-raising and even fraud.
Chinese ICOs currently underway are now considering their options. One told Bitsonline they may consider blocking their token sale to Chinese residents — who represented only a tiny percentage of investors anyway.
Government Wants to Avoid Personal Investment Risk
China has taken an extremely cautious approach to the Bitcoin, blockchain and cryptocurrency industry over the years. At times it has appeared curious and permissive, or more risk-averse.
Crackdowns have usually coincided with large inflows of money — the government does not want to see large numbers of Chinese citizens lose their life savings to dubious investment schemes.
Unfortunately, legitimate Bitcoin and blockchain businesses also get caught by the restrictions and negative publicity. Their past strategy has usually been to communicate with officials, place new limits on activities, and lie low.
What’s your take on this latest Chinese blockchain action? Let’s hear your thoughts.
Images via DACA, Pixabay