China ICO ban

Chinese government bans ICO fundraising and makes companies return money to the investors. Why is it happening and what will be next?

What are the reasons to such a disruptive decision for a growing economical sphere? I believe Chinese ICO market was oversaturated with scam-projects, and this desperate step protects investors from being involved into a fraud. Basically, Chinese government protects their people and a financial structure to a certain degree.

But banning ICO for such enormous number of people, will, of course affect the market in a whole world. International cryptocurrency status already noticed it. Bitcoin and ethereum immediately lost some value, but this is, probably, just a temporary situation.

Why? Because the whole point of the new regulations is to prohibit ICO, but you can still buy tokens in China. Therefore, tokens in the cryptosphere will be redistributed with an accent to foreign companies.

Concerning this ban the cryptocurrency market melted significantly, during September 4th, Ethereum rate decreased more than 20% and reached 290 USD/ETH. Bitcoin also fell, but not so rapidly, all the altcoins tickets were red.