praegu, some of token fundraising activities in China, such as initial coin offerings, have emerged for the purposes of financing and speculation. Such income are taken into consideration as illegal and disruptive to financial and economic balance. To be compliant with the messages conveyed during the countrywide economic work conference, to defend the legal rights of traders and to prevent economic dangers, we’ve the statement. The statement is based on the regulation of the People’s Republic of China, in addition to the laws of the People’s Bank of China, industrial banking and securities regulation and financing and economic activities regulation. Token fundraising refers to a process in which fundraisers distribute digital tokens to traders who make economic contributions within the form of digital currencies including bitcoin and ethereum.
By nature, it is an unauthorized and illegal public financing activity, which involves financial crimes such as the illegal distribution of financial tokens, the illegal issuance of securities and illegal fundraising, financial fraud and pyramid scheme. Relevant authorities will closely monitor the latest market status and collaborate with the justice department and local governments. Altogether, they will strictly enforce the current legal framework to solve the market chaos. Any criminal suspicion will be handed over to the justice department.
Digital currencies that are distributed during the token fundraising are not issued by the monetary authority, which has no legal property as fiat currency does and cannot circulate in the monetary market. Starting from the date of this announcement, all kinds of fundraising activities through token issuance should stop immediately.
Organizations and individuals who have completed token fundraising previously shall make arrangements such as refunding digital assets to investors to protect investor rights, and to deal with the risks properly. Relevant law enforcements will investigate and severely punish those who refuse to halt fundraising activities through token issuance and those whose completed token fundraising activates are found to have violated the law or regulation.
Starting from the date of this announcement, any so-called token exchange platform shall not:
- Be involved in offering exchange services between fiat currency and tokens
- Buy or sell tokens for digital currencies, or act as a central party facilitating the trading of tokens for digital currencies
- Provide price bidding or intermediary service for the exchange of tokens for digital currency.
For any token exchange platform, that violates the law or regulation, financial authorities will request:
- The telecommunication department to shut down its website and mobile application.
- The Cyberspace Administration of China to delist its mobile application from app stores.
- The State Administration for Industry and Commerce to discard its business license.
All financial institutions and non-banking payment institutions shall not directly or indirectly provide account opening, registration, trading, clearing and settlement services for token fundraising activities; shall not underwrite any insurance policy that relates to tokens and digital currency, or include any token and digital currency under the insurance policy coverage.
Should any financial institution and non-banking payment institution be found in violation of the law or regulation, they should be reported to relevant authorities immediately. The public should be highly vigilant about potential risks that come with token fundraising and trading. Token fund raising and trading pose multiple risks, including fraudulent assets, business operational failure, and speculation, jne. Investors are responsible for taking such risks themselves and thus are advised to remain cautious on suspicious projects.
For any illegal financing activity that operates under the name of coin, the public should become better at spotting frauds and always stay vigilant against risks, and should report to the authority any lead of law and regulation violation. Different financial industry organizations should study the regulation well and have member companies to voluntarily fight against any illegal financial activity that relates to token and digital currency fund raising; should stay away from this market chaos; should improve the education for investors; and jointly maintain the financial stability.