This morning’s China ICO ban announcement has sent shockwaves throughout the digital currency ecosystem, causing investors to panic and $25 billion to evaporate from the total cryptocurrency market cap.
As CCN.com reported, the People’s Bank of China (PBoC) declared initial coin offerings illegal and ordered all ICO investments to be returned to contributors. This ban has wide ramifications and will likely result in startups banning Chinese contributors from participating in future crowdsales, as EOS did this morning. News of the ban sent the markets tumbling, with nearly 90 of the top 100 cryptocurrencies experiencing 24-hour price declines that were greater than 10%.
Crypto Industry Leaders Weigh in on China ICO Ban
Industry leaders took to social media to share their thoughts on the PBoC squeeze and its potential ramifications. Saying what was likely on the minds of many community members, ShapeShift CEO Erik Voorhees dryly opined that China “just love to bans stuff.”
ICO critics did not pass up the opportunity to say “I told you so.” Ryan Selkis, better known by the handle TwoBitIdiot, predicted that the U.S. Securities and Exchange Commission will follow suit.
Looks like the PBOC agrees. SEC next and then it's burn baby burn. https://t.co/ggGhbfiq2M
— Ryan Selkis (@twobitidiot) September 4, 2017
Chainstone Labs founder Bruce Fenton disagreed, arguing that the “SEC will be a non-event” because “this space will grow way faster than [regulations] can keep pace with. He predicted that China will capitulate and reverse the ICO ban to avoid being “left in the dust by a sea change.”
I'll bet you 20 BTC that China will capitulate on ICOs…no major economy wants to be left in the dust by a sea change.
— Bruce Fenton (@brucefenton) September 4, 2017
Prominent crypto trader WhalePanda also weighed in, forecasting that the China ICO ban will primarily affect China-focused projects such as NEO and Binance.
— WhalePanda (@WhalePanda) September 4, 2017
He argued that this will have “no impact on Bitcoin and…very little [on] Ethereum,” so investors should “buy back the coins that you panic dumped.”
ICO Tokens Risk Exchange Delisting
Crypto analyst Tuur Demeester, on the other hand, found more in the statement to be concerned about. Noting that South Korean regulators are also reportedly strengthening digital currency regulations, he suggested that the application of securities law to ICOs will lead to fear, uncertainty, and doubt (FUD) about whether South Korean exchanges will delist ICO-backed ERC20 tokens.
Ethereum Classic to Benefit from PBoC Crackdown?
Venture capitalist Barry Silbert believes ethereum classic could find a silver lining in the fallout from the PBoC ICO crackdown. Silbert, whose Ethereum Classic Investment Trust reportedly holds 3.6% of all ETC in circulation, predicted that the SEC would deal initial coin offerings a fatal blow that will create substantial downward pressure on the ethereum price. He argues that the ICO bubble burst could lead investors to sour on ethereum and begin turning to ethereum classic as a smart contracts platform.
That has not happened yet, however, as the ethereum classic price is down 17% for the day.
Featured image from Shutterstock.
Last modified: March 4, 2021 4:59 PM