This was the message reported from China this week as they confirmed that they are cracking down on organisations raising capital via Initial Coin Offerings (ICOs) and Security Token Offerings (STOs).It was only in December 2018 that Beijing’s Municipal Bureau of Finance said “The ICO (initial coin offering) model is getting left behind for a new concept called STO. I want to issue a warning to anyone considering running an STO in Beijing,” Xuewen said. “Don’t do it in Beijing – it is illegal. You can only engage in such activities with the approval from the government.” Government approval, what does this mean?
This is at odds with recent promotion of a book on Crypto assets on a Chinese state-run TV last month that reportedly has an audience of one billion. The presenters telling viewers that Crypto assets could be one of the best investments they could ever make.
It was only in December 2018 that there were rumours that the People’s Bank of China was looking at ways to create its own cryptocurrency. It apparently thought this type of digital asset could replace Bitcoin and perhaps even the U.S. Dollar.
Given these conflicting messages, we spoke to GlenBit in Edinburgh that owns a Digital Asset platform powered by Japanese technology, as they have close contacts in China. GlenBit looked at various Chinese government websites and national publications and could find no mention of this ICO/STO ban. They did find an article on a well known Chinese website that follows Crypto news, called ‘Bi Hu’, which using Google translated this article https://bihu.com/article/1601678341 which said “After the ICO foam was broken, many countries began to ban ICO… Thus, a new form of new currency, STO, was born that will become the main mode to raise money for Chinese blockchain project”
Time will tell the actual stance the Chinese are taking…
