China’s Central Bank Issues Warning Regarding ICOs and Crypto Trading

The Shanghai branch of China's central bank, the People’s Bank of China (PBC), released a notice on Tuesday warning investors and consumers about risks associated with ICOs and cryptocurrency trading. The financial authority said they are still keeping a close eye on offshore exchanges and activity related to ICOs.

The warning from the PBC comes about a year after the authority banned ICOs in the nation, castigating them as an illegal fundraising tool.

Clampdown on Cryptocurrency Remains Resolute

According to the central bank, their restrictions have been successful. They noted how the “global share of domestic virtual currency transactions has dropped from the initial 90% to less than 5%.”

However, the release mentions how trading activity for domestic investors still remains high at offshore exchanges.

The central bank noted how they are still keeping tabs on offshore servers associated with up to 124 cryptocurrency trading platforms in an effort to maintain control over the sector.

Some of these digital exchanges have been busy changing domain names and shuffling servers around to keep ahead of investigation by authorities.  

Still Closely Monitoring ICOs

In the release, the PBC asked Chinese residents to report those who are operating ICOs, or a variant, if they are engaging in any suspected illegal crimes or activities.

The bank said they are still keeping a watchful eye on ICOs and will continue to research the sector in order to “proactively fight and prevent concerns.”

A government-led crackdown on ICOs back in September 2017 led to about $1 billion dollar’s worth of investments being returned to investors.

The PBC also noted how authorities have blocked public numbers that were suspected of releasing hype information related to ICOs and cryptocurrencies.  

Despite Chinese crackdowns on cryptocurrency and ICOs, the nation seems to be more bullish on blockchain. The Supreme People’s Court of China said earlier this month that blockchain was now legally permissible to be used in court to verify evidence as authentic. Research also shows that around 68% of worldwide blockchain-related patents come from firms in China.

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