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China Bans Companies From Raising Money Through ICOs (cnbc.com)
Regulators are about to begin scrutinizing China's initial coin offerings -- an industry worth hundreds of millions of dollars. From a report: Local outlet Caixin reported that a notice, issued by a working committee that oversees risk in the country's internet finance sector, said new projects raising cash or other virtual currencies through cryptocurrencies will be banned. It added that authorities will crack down on related fraudulent practices. The document defined initial coin offerings (ICOs) as an unauthorized fundraising tool that may involve financial scams, the Caixin report noted. The committee provided a list of 60 major ICO platforms for local financial regulatory bodies to inspect. Seven government administrations including the People's Bank of China, China Securities Regulatory Commission, China Banking Regulatory Commission and China Insurance Regulatory Commission issued a joint statement where they reiterated that ICOs are unauthorized illegal fund raising activity. The statement said authorities are banning all organizations and individuals from raising funds through ICO activities and that all banks and financial institutions should not do any business related to ICO trading.
What does this mean, dammit?
"[...] said new projects raising cash or other virtual currencies through cryptocurrencies will be banned. "
China is evil
On 02 Sep, Bitcoin was at $4,964, as of right now it is at $4,223. I wonder how much lower it will go?
Their authorities are already banning tech companies from pulling acronymic stuff we haven't even heard of.
I had no clue that you could raise money from Windows icons.
When a company goes public, it sells shares in the company to raise money; investors by equity, hoping that they'll get to reap the rewards of owning part of a successful company. These shares are sold as part of what's called an IPO (initial public offering).
An ICO (initial coin offering) is a similar concept, but far more general and interesting; rather than buying shares, an investor buys cryptographic tokens (called "coins") that represent some kind of ownership of (or affiliation with) the endeavor.
Because these tokens are just cryptocurrencies (perhaps built on top of the Bitcoin system itself), they are far more interesting than regular shares; they can be traded and split and exchanged in fractions of a coin—there's no need to deal in terms of one "share" at a time; you could sell 0.1234 coin, for example, and can make that deal 24/7, even on holidays. Moreover, cryptocurrency systems have built-in programming languages that can be used to control transactions in very intricate ways; essentially, you can control these tokens with "contracts" that are specified with the precision of a programming language—this is why people call cryptocurrencies programmable money. Furthermore, unlike shares, you can control the coins you buy completely; you can choose to keep them under the control of a third-party (such as a "brokerage" exchange), or you can choose to store them in any way that you choose, such as on a thumb drive that you keep around your neck, or split among several people, or cut up cryptographically and buried across the cyber-and-or-physical landscape like Horcruxes. It's all just data, and the possibilities are therefore endless.
It doesn't matter what China does; they cannot control it.
Oh yes, people will go to jail, but the Organism that is the cryptocurrency economy will learn and adjust through that age-old process, evolution by variation and selection. Even if real-world, public-facing endeavors are shut down, that won't stop virtual endeavors on the Internet; that won't stop people in China from making investments in endeavors in Europe, or anywhere else, and reaping their rewards secretly. Fuck You, authoritarians; the libertarians don't care about your rules anymore.
An ICO (initial coin offering) is a similar concept, but far more general and interesting; rather than buying shares, an investor buys cryptographic tokens (called "coins") that represent some kind of ownership of (or affiliation with) the endeavor. Because these tokens are just cryptocurrencies (perhaps built on top of the Bitcoin system itself), they are far more interesting than regular shares.
Nice analysis, but your use of the word "interesting" is interesting.
What is interesting about people investing in ICOs is that they get nothing real for their money. They are investing in something that they hope will be valuable for no other reason than that other people think it's valuable. This is the very definition of a bubble; they could be investing in beanie babies or tulip bulbs or collectable cards.
You're a crude individual who has no place in a civilized society.
You are suggesting to seize the equipment and to terrorize otherwise peaceful, voluntarily interacting people just because you think you've got a better way to allocate their resources; you're barbaric.
All the money going into the greed machine that is cryptocurrency and ICOs need to be spent on creating real jobs and supporting the real economy. Mining hardware needs to be seized and graphics cards need to be given back to gamers. Even Goatse [goatse.cx] has a coin now.
Money needs to to be wrenched from the hands of tyrannical governments and set free. Wealth interprets currency regulation as damage and routes around it. Always has, always will. Now, however, cryptocurrencies open a whole plethora of new and hard-to-crack/track methods for people to protect their wealth from government/corporate parasites.
Good luck banning cryptocurrencies. That's like banning math. I'm sure it'll work out just fine. :/
What a terrible definition:
"The document defined initial coin offerings (ICOs) as an unauthorized fundraising tool that may involve financial scams, the Caixin report noted"
-it has nothing to do with coins, or cryptocurrency, or being initial, or an offering. As long as it's unauthorized and raises funds, it is, by this asinine definition, automatically considered an ICO.
-if it's authorized, suddenly it's not an ICO.
-the "that may involve" clause adds no precision to the definition. Why is it even there?
" It's a piece of data with which you can control a humongous, global network of computers that I assure you is very real."
What???? The coins don't control the network, the miners do.
Also if you replace a couple words with what the GP said and it comes back the same.
in one case I'm buying ownership of the company. In another I'm buying a good (albeit an intangible one). The only real parallel is that in both cases you might be buying something completely worthless. But in the case of buying shares there's decades of case law and regulations about how that all goes down designed to protect small investors from being swindled out of their life savings (at least there are in the States, not sure about China).
China can and should control it. People can do dumb things in mass. The Housing crash of 2008 is a good example. Recent studies showed that it was mostly caused by upper middle class people buying houses to flip and inflated prices and not working poor buying McMansions. The crash happened because they weren't living in the houses so that when they eventually inflated the market too far to sell them they just let them foreclose and cut their loses. But that was only made possible by deregulation that made it profitable to sell risky house flipper loans to the upper middle class.
TL;DR;. You want the government to control what people can and cannot invest in. Otherwise you'll have massive economic crashes for no good reason.The economic equivalent to traffic jams on a clear highway.
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China has a history of banning science. I'm sure banning math will be nearly as easy.
Point to a deer and call it a horse.
Point to a deer and call it a horse.
It's all fun & games until somebody gets their eye put out with an antler.
It's like that 'The Gods Of The Copybook Headings' Kipling poem; Society can only ignore and/or deny reality and human nature just so much for so long until it's faced with stark and unavoidable negative consequences usually costing obscene numbers of innocent lives and unspeakable human suffering.
And yet, here we are as a society playing out; "the bandaged fool's finger goes wobbling back to the fire" once again. It's rather disheartening to watch your society seemingly dead-set on destroying itself.
Strat
Progressivism (aka US 'Liberalism'): Ideas so good they need a police/surveillance-state to enforce.
The earlier you are in, the better off you are as others buy in after you.
Your decades—no, centuries—of case law and governmental regulations are primitive, ad-hoc, wooden-gear playthings in comparison to the advanced logistical machinery offered by cryptotoken systems.
Anything your traditional stock shares can represent, cryptotokens can represent better, and without the need to rely on the bureaucrats of some baroque, kabuki rendition of authority, whose only real power is the unstable and poorly defined ability to tell men-with-guns to make trouble for this person or that.
BTW, the Housing Crash of 2008 was due to the bad policies concocted by those same kabuki artists in government: They increased moral hazard by keeping federal insurance while de-regulating risky investments; they bought votes by forcing banks to lend huge sums of money to worthless people; they screwed around with the investment signals in the construction market, as a way to offset their previous error in pumping up the tech stock market in the late 1990s.
The cyptotoken systems remove the levers from the hands of these fools.
in this case the 'policies' were repealing several laws that kept various types of banks from interacting (Wall Street vs Main Street) and various accounting rules. This stuff started under the pro-corporate rule of Mr Clinton and reached it's apex under Bush Jr. Before that we had 70+ years without a major crash (80s S&L was small potatoes by comparison).
Cryptotokens aren't anything special. Their prices are high right now because of money laundering, drugs and ransomeware. If you doubt me ask yourself what you can buy with them. You're never going to pay your mortgage with bitcoin. Eventually the government will crack down not to stifle freedom but to control the sorts of crime most people agree should be controlled (I'm aware of the anarchists who think everything should be legal).
There are good reasons for a society to be controlled and regulated. There is such a thing as experts and people who have studied things. This isn't to say you can't be lied to by phonies. But it also doesn't mean you throw your hands up and declare anarchy just because running a society is hard.
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That's why people have designed decentralized cryptotoken systems (among other things), so that increasingly, we don't have to rely on the transient success of any particular group of fallible humans controlling the reins of power.
Infrastructure, not politics, is how you keep society well ordered; the lack of a ruler (anarchy) does not imply the lack of order.
Your "wealth" was stolen from the workers who actually created it.
I've been trying to wrap my head around this for a few days now and don't really get it. With an IPO you get an actual stake in a company - for good or bad. With an ICO you get... some digital tokens? Why can they not get devalued through creating more coins when the company wants to sell more? Bitcoin maybe I get because there's a limited quantity possible, but is that the case for these other ICOs? Can someone explain?
And it's not a case of big, bad commie government doesn't understand anything it can't control. The Chinese government wants stability in the country because if the general population doesn't revolt, they can stay in power. I have been to China several times within the past 10 years and my last 2 girlfriends were born and raised in China ladies. I can tell you that China has quite possibly the most unsophisticated investors on the planet. Here in the USA, if people don't have the money to invest in the stock market, they won't do so. Sometimes they don't have time to research it so they won't invest. And I know some people who have the money but aren't interested in doing it themselves so they just pay people to invest their money for them. In China, lack of knowledge about the stock market and limited funds do not discourage investment. It's crazy, but it's like the entire country is filled with people who fall for Ponzi schemes. The most recent of the two Chinese ladies I mentioned earlier knew on some level that it actually was possible to lose money in the stock market, but she seemed to think that only stupid people ever lost money and the fact that I wasn't putting every dime I had into the market meant that I was throwing away free money. She didn't claim to know what I should be putting that money into, and I do actually put some money into investments, but she often complained that I wasn't putting enough in. Everything I've read about investors in China just convinces me that the general public sees the stock market as a "can't lose" proposition and I can certainly understand the government not wanting to see tons of rip offs done with ICOs that go nowhere and then the population gets upset and social upheaval results.