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Authorities in China give warning about those holding crypto fundraisers which are illegal

There have been a lot of issues associated with raising money through initial coin offerings (ICOs). In the beginning, a lot of people believed that all of these ICOs were scams and that no money was going to be seen by investors at the end of the road.

Authorities in China give warning about those holding crypto fundraisers which are illegal August 27, 2018Leave a comment

There have been a lot of issues associated with raising money through initial coin offerings (ICOs). In the beginning, a lot of people believed that all of these ICOs were scams and that no money was going to be seen by investors at the end of the road.

While there were a lot of fraudsters in the market, this of course was not the case. The explosion in popularity of this method of fundraising also took the authorities largely by surprise. This meant that there were little to no regulations in place and the oversight was limited. Also, a lot of people were not properly educated about the investments which they were making which made the process a lot more precarious.

As a result of all of these uncertainties, authorities across the world warned investors in their respective jurisdictions to enact extreme caution when it came to making investments in the ICO space.

The likes of China and South Korea even went as far as completely banning ICOs from taking place on their shores. This happened in September of 2017 and nearly one year later, these bans are still in place.

There is a lot of talk coming out of South Korea indicating that as soon as proper guidelines have been implemented in the country related to cryptocurrencies and ICOs, that they will be legalized once again. However, China has no intention it seems to allow the ban in their country to be uplifted any time soon. They have now issued a fresh warning to those people and groups who are looking to raise funds for cryptocurrency projects in an illegal manner.

What are the details about this latest warning?

It was a joint statement that was issued by the central bank and regulators in China related to schemes which are affiliating themselves with blockchain technology and cryptocurrency projects which are trying to raise funds.

There were six major watchdogs in the country that were involved in the issuance of this statement. It alleged that people were looking to raise funds illegally and many of these projects were examples of “illegal fundraising, pyramid schemes and fraud.”

In particular, they mentioned those projects which use overseas servers while utilising the likes of chat forums and train tools online in order to collect payments from the Chinese public for their projects.

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