The People’s Bank of China officially banned security token offering (STO) businesses on Saturday, in another blow to digital currencies in mainland China.

Pan Gongsheng, a deputy governor of the People’s Bank of China, the country’s central bank, told an internet finance forum in Beijing that “illegal” financing activities through STOs and ICOs were still rampant in the mainland despite a nationwide clean-up of the cryptocurrency market last year.

“The STO business that has surfaced recently is still essentially an illegal financial activity in China,” he told the forum, according to state-owned China Central Television. “Virtual money has become an accomplice to all kinds of illegal and criminal activities.”

An STO is an initial coin offering (ICO) backed by tangibles such as assets, or profit or revenue of a company. An ICO is fundraising activity that allows digital currency start-ups to raise funds through the creation and sale of digital “tokens”.

In addition to this formal acknowledgment of the ban on both initial coin offerings and STOs, the deputy governor also outlined that the majority of the financing operations, which were conducted virtual money in China, are suspected of being pyramid sales schemes, illegal fundraising operations, and other types of financial fraud.

The chief of Beijing’s Bureau of Financial Work, Huo Xuewen, has also reportedly issued a warning against STO promotion, saying: 
I want to warn those who are promoting STO fundraising in Beijing. Don’t do it in Beijing. You will be kicked out if you do it.