Chinese ICO ban: aftermath

Yesterday, the People’s Bank of China has issued a statement regarding its new policy on initial coin offerings, or ICOs. While previously tolerating such operations in the country, now the PBoC clearly stated the all initial coin offerings and token trading is not accordant to the Chinese laws. They must be ceased immediately, the PBoC concluded.

And when the Chinese government bans what it deems necessary to ban, usually it’s difficult and dangerous to overpass the ban, especially for corporate entities. This is why the Chinese market’s panic is justified. Bloomberg notes that 105,000 investors in China could suffer. Some cities have less residents. The media took this number from the report of The National Committee of Experts on the Internet Financial Security technology. This report helps to understand the scale of catastrophe even more: China has 43 ICO platforms and venues raise are almost $400 million.

Image courtesy of Bloomberg

Some Chinese ICO platforms have already stopped its business in full compliance with the law. The ICOINFO website has announced the full suspension of each and every function connected to the ICO before the regulators clarify their position (although the PBoC was clear enough). BTCC, the Bitcoin platform based in Shanghai, has also ceased its ICO-related activities, and Caixin told that the authorities forced them to close the blockchain conference scheduled for the next weekend.

After the news about the decision of the People’s Bank of China, two most popular cryptocurrencies lost value. Bitcoin became 5% cheaper (although it is currently on its peak stages and the drop waves can appear just due to the market unstable nature), and Ethereum – the second biggest cryptocurrency and the main ICO instrument, lost 12% (here it looks like the Chinese disaster has, indeed, harmed the altcoin).