China’s initial coin offering ban is correcting Cryptocurrency markets
As fast as you can say Ethereum, things change amid a globally connected market that’s heating up for blockchain and ICOs. Read on.
People’s Bank of China, the central bank of the country, has officially declared initial coin offerings (ICOs) as an illegal method of raising money.
It may not be the tightening of VPNs, but this “crackdown” on ICOs is a fascinating issue and approach to new virtual currencies that could upend the traditional order. Amid the row in North Korean, South Korea is one of the biggest players on the Ethereum front.
China is making it crystal clear how it views the Ethereum platform and ICO fundraising by wording an edict that makes its activities illegal.
Labor Day weekend saw a major “correction” in the market, of 11% or roughly a $20 billion cryptocurrency price correction.
New Era for ICOs with China Ban
China as a rising super-power of AI and robotics is approaching innovation on its own terms. China’s central bank [link in Chinese] is pretty adamant about the ICO funding ban, which it views as a “threat to economic and financial order.”
The total value of the 866 digital currencies tracked by CoinMarketCap.com declined from close to $180 billion on Saturday to $160 billion on Monday morning.
China is a leader in FinTech, but has a cat and mouse approach to regulation that is related to its censorship and the Great Chinese Firewall. China is seeking cyber sovereignty that benefits Chinese companies, and could be a winning strategy for out-competing other countries in the race to AI.
Could this be the expected Crypto bloodbath (breaking of the bubble) many were expecting?
Boom, Bubbles and Bust of Crypto Currencies
The total cryptocurrency market is still well up on the year and 2017 has been like a new birth for the future of the Blockchain, with dozens of key initiatives by countries, banks and blockchain startups themselves.
The past four months, from May 2017 to August has seen a surge in market cap of cypto-currencies officially making the blockchain a mainstream event. However this event has also led to an estimated 10% of ICO activity as being fraudulent.
Initial Coin Offerings: Crypto Fraud or Financial Innovation?
With an ICO, a startup issues their own digital coin to raise money, and while this has fuelled a surge of market cap, the piggy-back effect on the Ethereum platform, also raises concerns of illegal activities and transactions that are hard if not impossible to regulate.
Local Chinese media outlets first reported this story. #BitcoinChina
According to Axios, in July, the U.S. Securities and Exchange Commission issued a warning that some ICOs may be subject to securities laws.
This is a developing story I’m watching, and I’ll update it if needed.
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