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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.
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.