A notice from a committee led by China’s central bank today announced an immediate ban on ICO funding, which has “seriously disrupted the economic and financial order.”
Financial news site Caixin reported that the committee has prepared a list of 60 exchanges which will be subject to inspection and a report. In the meantime, there will be an ICO freeze in China.
ICOs involve raising funding by creating and selling new crypto tokens — commonly based on Ethereum — to investors. That’s led to comparisons with securities, with much speculation over whether financial regulators will look to regulate the space.
The Chinese committee voiced concern that some ICOs are financial scams and pyramid schemes. That echoes a recent warning from Singapore’s MAS.
“ICOs are vulnerable to money laundering and terrorist financing risks due to the anonymous nature of the transactions, and the ease with which large sums of monies may be raised in a short period of time,” MAS, Singapore’s central bank, said in an August 1 statement.
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