China had plans for crypto currency spreading across the country, China has started cracking down on crypto currencies now.
China said they have faced growing number of scams in initial coins offering in the country so they are putting an end to it to stop these scams.
The People’s Bank of China has put a ban on initial coin offerings—fund raising by launching new digital tokens—China has launched a series of investigations, announced on Monday.
As you know about the digital currencies especially Bitcoin which saw huge popularity and value increment over the last couple of years and was worth more than an ounce of gold in March, this created investment panic among entrepreneurs rushing towards initial coins offerings to create and sell digital tokens to investors.
According to Bloomberg, the practice of initial coins offerings created $1.6 billion last year which raised security concerns from the US Securities Exchange Commission. Commission urged for regulating some ICOs in July and August and warned for risks involved in investing in ICOs including scams.
According to China the ICOs are a form of “unauthorized and illegal form of public financing.” The ICOs have seriously disturbed the economic and financial of the country.
The People’s Bank China has confirmed that it has banned all sales currency conversions and digital tokens, the bank has prohibited all the financial institutions and non-bank payment organizations from offering ICOs.
This hard blow on ICOs could affect the leading crypto currencies like Bitcoin and Ethereum in the following days, Bitcoin is already down by 20% from its highest point it reached four days ago on September 1.