China is cracking down on initial coin offerings (ICOs). According to a report from Chinese financial news site Caixin, the country is set to begin a regulatory campaign that will ban new projects that raise cash or funding through the use of cryptocurrencies.
A document provided to Caixin via a committee led by China’s central bank that oversees risk in the country’s Internet finance sector described ICOs as an unauthorized fundraising tool that can sometimes involve pyramid schemes and other financial scams. These, according to the document, “severely disrupt the social and economic order.”
Singapore’s central bank echoed similar sentiments. In an August 1 statement, the bank said ICOs are vulnerable to money laundering and terrorist financing risks due to the anonymous nature of transactions. The ease with which large sums of money can be raised in such a short period of time is also a concern, the bank added.
Bitcoin, the world’s most prominent cryptocurrency, saw its value drop a bit on the news. As of writing, Bitcoin is trading around $4,238 which is down about 8.5 percent on the day. Other cryptocurrencies, however, were hit harder. Ethereum is down nearly 20 percent as of writing.
The publication said the committee supplied a list of 60 major ICO platforms for local financial regulators to comb through and report on. Two of the country’s largest ICO-buying platforms – ICOage and ICO.info – have already suspended operations according to reports.