China officially banned ICOs – People’s Bank of China issues formal notice

China has officially banned all ICO (Initial Coin Offerings) in a recent article by the People’s Bank of China. This didn’t come as a surprise as the government has already leaked some warnings and rumors have been spreading regarding this issue. However, this was the worst possible outcome as some Chinese platforms were still optimistic that there would only be limitations instead of a direct ban. ICO platforms like ICOage and ICOINFO have already suspended operations prior to this announcement. In addition, the notice warned people about the dangers of investing in cryptocurrencies and stated directly that cryptocurrencies are not legal currencies in China. Cryptocurrencies are regarded as commodities in China and cannot be used in place of the government currency, the Ren Min Bi (RMB).

China (People’s Bank of China) Bans ICOs

Too Fast too Furious?

ICOs in China has gained a lot of traction in recent months due to the rising interest in blockchain technology and the potential to make large gains from sold-out ICOs. This has lead to more than 300 ICOs going online in China, a lot of which was hastily put together. Some suspicion also fell on a few ICOs where leaders were accused of insider trading or faking the contribution amount. The government intervention in this field is most likely a response to the possible rise in the number of illegitimate ICOs.

ICO Refund ?

Cause 2 of the article asked for “individuals who have completed the financing of the tokens should make arrangements for repatriation and so on“. Currently, platforms such as ICOinfo are contacting project owners of ICOs that have NOT yet distributed tokens for a refund. It is unknown what will happen to projects that have already been sold on the market. Although it would make little sense refund tokens that are worth more than the initial ICO value.

HMS cancel ICO and refunds

The Global Health mutual Society Based on Blockchain (which is a real mouthful) has decided to refund the ICO and return coins raised to participants. The following message is left on the website:

[Note analysis of this event is still ongoing and updates will be added to this post]

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Michael Gu, Creator of Boxmining, stared in the Blockchain space as a Bitcoin miner in 2012. Something he immediately noticed was that accurate information is hard to come by in this space. He started Boxmining in 2017 mainly as a passion project, to educate people on digital assets and share his experiences. Being based in Asia, Michael also found a huge discrepancy between digital asset trends and knowledge gap in the West and China.