Chinese regulators are considering the possibility of a sweeping suspension of all initial coin offerings (ICOs), according to reports.
A report by Tencent has revealed details of a notable meeting among Chinese regulatory authorities that took place on August 18. The joint meeting, hosted by the People’s Bank of China, the country’s central bank, was also attended by officials from the Securities and Futures Commission, the Banking Regulatory Commission and the insurance regulatory body, among others.
Regulators reportedly discussed means of regulatory oversight that included control over the size and scale of the ICOs, strengthening disclosure requirements and issuing additional investment risk warnings. Notably, the report added:
In addition, if a large [investor] risk is found, the regulation will even suspend all ICO activities and rectify them.
As things stand, the regulations are at a preliminary stage with discussions and comments collected from multiple regulatory bodies with policies speculated to be introduced at some point this this year.
The ICO crackdown could ultimately draw parallels to the regulatory squeeze on bitcoin exchanges earlier this year. The People’s Bank of China investigated and effectively put a halt on the Chinese bitcoin trading market, once the world’s largest, at the turn of the year. Chinese exchanges only resumed bitcoin withdrawals in early June following comprehensive reforms of AML/KYC policies, nearly four months after banning bitcoin withdrawals.
Earlier in June, a counselor to China’s central bank called for the ‘moderate regulation’ of ICOs in a way that the government’s reach did not burden innovative projects. However, the PBoC’s actions taken against the entire regional bitcoin market proves that no action is too extreme for the financial regulator and watchdog.
The cumulative investments pouring into ICOs in the first half of 2016 has already reached CNY 2.616 billion (approx. $400 million), according to Yicai, citing an official report.
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Last modified: May 21, 2020 9:17 AM UTC