Seven Chinese regulatory bodies issued initial coin offering rules that totally ban the practice by cryptocurrency and Bitcoin wannabes.
ICOs are often compared to initial public offerings. Wherein the latter refers to a private company hoping to raise funds via a public sale, an initial coin offering is an unregulated method of crowdfunding by using a cryptocurrency.
The Ministry of Industry and Information Technology, the State Internet Information Office, the State Administration for Industry and Commerce, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the official insurance regulator together said that ICOs are potentially illegal fundraising activities and have gravely disrupted normal economic and financial order, according to China Money Network.
During the first half of this year, 64 ICOs were issued in China, raising crypto currencies worth a total of US$420 million. TienPay was planning to launch its own ICO later this week to raise funds for a movie project in Shenzhen, but those plans appear stalled with the final rules issued by the Chinese government.
These is no good way to spin this news. The regulatory bodies will not reverse their decision, and the wording of the decisions further casts a dark shadow over the use, sale, or mining of bitcoins and other cryptocurrencies in China.