PBoC Will ‘Crush’ Foreign ICOs Targeting Chinese Investors: Official

A vice governor of the People’s Bank of China (PBoC) has again issued strong statements against initial coin offerings (ICOs), singling out those that have moved overseas, but are still marketing to investors in China.

Speaking at an internal meeting of the Internet Finance Rectification Working Group on Monday, Pan Gongsheng reiterated that ICOs, “disguised” ICOs and crypto asset trading are illegal in the country, and represent illicit forms of fundraising and securities issuance.

Although China issued an outright ban on ICOs in September 2017, Pan said a lot of the projects that moved overseas as a result are still making themselves available in the Chinese market, according to a report from local business media source Yicai.

Pan was quoted as saying:

“Any new financial product or phenomenon that is not authorized under the existing legal framework, we will crush them as soon as they dare to surface.”

Authorized by China’s State Council in 2016, the working group is tasked with executing financial regulators’ directions for controlling illegal activities in the sphere of internet finance.

The report did not offer details on how the body intends to curb access to foreign ICOs and crypto trading. However, the news was followed by an item from another state-owned media source indicating that China’s messaging giant WeChat appears to have increased its efforts to spot cryptocurrency traders using the platform over recent months.

The later report suggested the messaging service had restricted its payments function of such users – for instance, by limiting the fiat currency they can receive on any day. In January, Pan notably pushed for wider cryptocurrency trading ban in China according to an internal memo circulated at the time.

WeChat is not the only service platform that appears to have taken steps to cooperate with regulators.

After the 2017 ICO ban, one online forum called Zhishi Xingqiu (“Knowledge Planet” in literal translation) became a popular platform used by agents from outside China to access retail investors in the country, for a fee making investments on their behalf.

In March, however, the platform issued a statement saying that it would monitor threads and ban those who use the platform to solicit investors in ICO tokens.

PBoC image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.