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China's Central Bank Warns Investors Of Risks In ICOs, Crypto Trading


China's central bank warned investors of risks in Initial Coin Offerings or ICOs and cryptocurrency investment amid the increased activity by overseas operators.

In a public notice, the Shanghai Head Office of People's Bank of China or PBOC urged consumers and investors to increase their risk awareness of ICO variants, and to be away from overseas operators issuing ICOs and virtual currency transactions for domestic residents.

Chinese regulators had started a crackdown on cryptocurrency exchanges in Septermber 2017, as the growth of the crypto market in the country raised concern.

The PBoC had issued a blanket ban on all ICOs, citing it as an illegal practice of fundraising. Many big crypto exchanges in China relocated to Hong Kong and Japan following the clampdown.

In its latest notice, the bank noted that the global share of domestic virtual currency transactions has dropped from the initial 90% to less than 5%, effectively avoiding the virtual currency bubble.

In August, it was reported that central bank's internet authority was targeting up to 124 offshore cryptocurrency trading platforms serving China's citizens by blocking their IP addresses.

The PBoC now said it would strengthen the monitoring of the offshore servers of 124 platforms. It will also closely monitor ICOs and its multiple variants, strengthen research and judgement, proactively fight and prevent concerns.

The bank also asked the investors to report suspected illegal crimes to the relevant regulatory authorities.

Chinese internet giants Baidu, Alibaba, and Tencent have blocked cryptocurrency-related activities on their platforms amid the country's intensifying crackdown on cryptocurrencies.

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