A high-ranking official at the People's Bank of China (PBoC) has issued strong statements against initial coin offerings (ICO), in particular ones that are based overseas but are aimed at Chinese investors, industry website Coindesk has reported, citing information from the local press.
During an internal meeting of the Internet Finance Rectification Working Group yesterday, PBoC vice governor Pan Gongsheng reiterated China’s position that ICOs, “disguised” ICOs and digital currency trading are illegal in the country, and represent illicit forms of fundraising and securities issuance.
Last September, China imposed a ban on token sales and crypto trading, a move that send shockwaves across the digital currency space and forced many China-based ICOs and other crypto-related projects to move to other jurisdictions, such as Hong Kong and Singapore. Yesterday Pan said that a lot of these projects were still available in the Chinese market, according to local business news outlet Yicai. Pan reportedly sent a harsh warning to projects of this nature.
"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," Pan was quoted as saying.
At the moment it is unclear how the working group, which was established by China's State Council in 2016, plans to curb access to foreign ICOs and crypto trading. However, the Yicai report was followed by a piece from another media outlet, suggesting that the popular Chinese messaging app WeChat had over the past few months ramped up its efforts to spot digital currency traders using the platform. The report suggested that the app had restricted its payments function of such users.
In January, Pan notably called for an expansion of the crypto trading ban. Reportedly, he also said at the time that the local authorities should block domestic and foreign websites and close mobile apps that provide centralised cryptocurrency trading services to Chinese users, and sanction platforms that provide cryptocurrency payment services.