Slashdot Mirror
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.
China is evil
That's 40b that never existed in the first place. When you inflate a balloon, it looks like there is a lot, but essentially, all you have is a thin layer of rubber that you started with.
And when it busts you don't even have anything in your hand to show for your effort. In other words, jacking off is more productive.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
China subsidizes cryptocurrencies with free electricity and other means. They are fighting themselves.
All this means is people can't hide their money from the government. The government is making all CC illegal for the most part. They will allow CC in the future but only ones that they approve. So as of right now having a CC is extremely risky for people in China so people are dumping them as quickly as possible so they can have actual cash instead of a piece of digital code that will not be usable to them and might get them arrested.
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 just made that up out of whole cloth. The Chinese people don't trust their fiat. They are trying anyway to convert their cash into anything that they can use to take currency out of the country.
You are 100% correct. As the spouse of a Chinese national, and a person who has spent a LOT of time (full time) living in China, you are 100% correct. Wealthy Chinese want their money out of China, it's heavily manipulated and controlled, and China is finally cracking down on tax evasion (which is rampant in China).
And you are also completely wrong. Wealthy Chinese want their money out of China - but they also really do NOT want to end up in a Chinese prison or executed (yes, high amounts of tax fraud can receive a death penalty). So they tend to use legal vehicles only, including investments in actual registered overseas companies, legal gifts to family (why do you think the massive rise in "finding my overseas cousins" happened?), and setting up HK corporations that will invest funds overseas. Bitcoin and CC in general are now verboten as financial instruments in China, and no one will trust them anymore - because playing with them in any reasonable amount (10MM RMB or higher) can result in jailtime or worse...
Sucks if you're a CC speculator who's been relying upon the run-up in China/Asia to continue your gains - but that stool has just been kicked out from under you.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
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.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
No, it's going to be illegal to move more than $50,000 of CC outside China per year like it is with most other currencies. You have to invest in an actual physical/tangible asset or legal company to move any currencies larger than that amount. BTC and such are attractive because they can cross borders instantly, but with that gone - what's the attraction over gold, US dollars, or shares in a REIT?
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
but with that gone - what's the attraction over gold, US dollars, or shares in a REIT?
What would be the attraction of CC over gold, etc?
1. You needn't find a company to trust and you won't need to sign any papers.
When buying REITs or Gold you need to do due diligence on the company. One to One cryptocurrencies are easier than REITs or Gold. Meaning, that if you feel BTC is a solid investment in and of itself, it's an easier purchase, an easier asset to own than REITs or Gold. Also, when purchasing gold, one is not buying "gold" one is buying a piece of paper promising that the paper is backed by gold.(Meaning even more due diligence on the company in question.)
2. In an existential emergency (the second coming of Mao or the horrors of the Cultural Revolution) you can transfer your CC to another wallet. At that point you are in violation of law; you are a criminal. But if you are already a criminal because of your education, status, wealth, business dealings (whatever) and you're trying to escape with your life - in that caset your assets are "safe."
We both know that if one is caught that torture is an effective password breaker but that is yet another story. Your wife, child may be safe; may have the money; may have already moved it to another wallet. You will be tortured but, at least, your family is safe.
If you're scared of your govt then you need to further restrict its powers
Vote 3rd Party in 2016 and beyond
The earlier you are in, the better off you are as others buy in after you.
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.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Can you easily acquire tens or hundreds of thousands of dollars in jade and gold and diamonds with cash?
Yes. Visit any high-end jewelry shop in Shanghai, Guangzhou, Shenzhen, Beijing, Nanjing, or any larger city. I have a good friend who sells such jade, and she regularly sells 2-3 bracelets a month that are worth more than 1 million RMB. Typically cash sales, too...
Go to your neighborhood ICBC or BOC and watch. You'll see dozens of people an hour walking in and out with literally bags full of RMB. China is still very much a cash society - it is nearly impossible to get by in China without cash. Credit and fast pays are coming, but cash is still king.
Can you easily leave China with said jade without anyone knowing?
Yep, just slip it on your wrist and be done with it. Same with ruby and diamond rings from Thailand, gold from HK and Malaysia, and many other precious metals and diamonds. Customs officers won't blink at all when a lady is wearing a nice gold and diamond necklace - no thought at all that it may be worth a half million dollars.
But what if you're not that wealthy? What if the most you can squirrel away is $5,000 or $10,000 or $25,000 a year? Would REITs make sense? You would need to spend a lot of time investigating said companies etc. And, if you bought jade or gold you would spending $1000+ travelling to a foreign country, you would lose a fair bit of value when selling the jade to the US buyer. That takes a lot of time and a lot of due diligence. Is it really better than buying CC?
Yes, because how do you sell - liquidate - that Bitcoin to get cash? Bitcoin - like a CC - has ZERO privacy with the transactions. A given chain may be anonymous, but once you know who owns that chain - you know EVERYTHING they ever did with it. And how many exchanges in China will give you cash for your CC without the required reporting to Beijing over who and how much?
China has insane currency control laws on its books, and violation of them - even "structuring" to get around any limits - can and will result in significant jail time. Why would a sane, rational person even consider a purely electronic currency that records everything you've ever done with it, and must be reported to the central authority any time you wish to actually use it? Or even purchase it?
I don't know? I'm not arguing that it is. I'm actually very curious. One of the reasons I'm interested in CC is for just this reason: emergency ethics. How does one survive the economic and political collapse of your country? Think 1930s Germany for Jewish people, or 1960s China, if you're tainted by the scourge of one or more of the 4 Olds, Or if you're living in Venezuela or Zimbabwe during the violence and massive inflation.
How is a CC a supply for emergency ethics? How portable is that CC? If you were a Jew in 1930s Germany, and had successfully masked your name, how would you like to have a single donation to the local synagogue with your CC suddenly get tracked back to you?
IF you want to have an emergency store of value, silver is probably your best bet. Incredibly liquid - you can exchange it for cash, on the spot, anywhere around the world without any records. You can buy it for cash the same way. It is low enough value per ounce that it won't break you to accumulate it or spend it, and it is still valuable enough that 10 pounds of the stuff is a couple of thousands of dollars in value.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!