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The Chinese government is not on board with financial activities based on digital currencies. Therefore, the authorities are reportedly taking a stand against initial coin offerings that began to shape a new line of possibilities for start-ups. This approach will likely lead to the suspension of several pending reviews. On top of that, there is going to be a long time until lawmakers would start regularizing this new territory.
Two Summits This Summer that Gathered Players within the ICO Sphere Were Cancelled under Suspicious Circumstances
One of the signs signs of offensive demeanor against digital coins was the cancellation of the 2017 DACA Blockchain International Summit Forum. The event was supposed to take place in Beijing last Saturday and gather hundreds of ICO and Bitcoin businesses and investors together.
However, organizers made a last minute announcement that the event would no longer be possible. The explanation they offered regarded public safety concerns. There were too many purchased tickets and too narrow a space.
The event cancellation would have gone unnoticed if it weren’t for a similar phenomenon that took place recently. On August 22, Shanghai authorities put an end on the Finwise 2017 Global Blockchain Summit. Most people believed this incident to be a misunderstanding between organizers and business authorities.
The Central Bank of China Is Considering to Label Initial Coin Offerings as Illegal
It seems that an emergency report triggered this chain of events. On August 21, the central bank received a warning that viewed initial coin offerings as a new type of illegal practices. Stakeholders of the central bank studied a large collection of ICO white papers.
Their main conclusion was that 90% of these activities bear signs of fraud or illegal cryptocurrency funds. On the other hand, the study suspects that only 1% of the companies are truly unlocking this new form of financing for technology projects.
As a consequence, the Chinese central bank is weighing in the decision to classify this kind of financial activities as illegal fundraising. The institution resorted to a 1998 act that the Chinese State Council issued which stipulates that fundraisings need legal approval to be considered valid.
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