HYPE+0.50%
Crypto
Chinese Government Reaffirms Anti-STO Stance
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Chinese authorities have released a new document reaffirming their position against STOs and ICOs in the country. The report also contains risk tips for investors and how to avoid what they call “scams.”
When China first banned ICOs in September of 2017, it sent ripples throughout the cryptocurrency world. They followed this up with a successive ban on STOs which was merely an expansion of the same policy. China’s regulators have reaffirmed this ban many times times now,
Now, China has released yet another long-form document outlining the country’s official policy on STOs. It contains nothing surprising, but it is just a reminder that nothing has changed. The document was put together by the Beijing Internet Finance Industry Association.
Words of Caution
The report outlines three major points with the goal of creating a “positive and healthy financial ecological environment.” These tips for investors are:
- All institutions and individuals most together resist and prevent illegal fund-raising in the interests of virtual currencies, “blockchain,” ICOs, STOs, and stablecoins.
- Investors should beware of blockchain firms fooling you with terms like the “sharing economy,” “crowdfunding,” and so on.
- Stay rational. Do not believe the hype and assess risks first.
These three guidelines were the main takeaways of the report. The document echos what the Chief of the MBF, Huo Xuewen, said just last month:
“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…Don’t do it in Beijing – it is illegal. You can only engage in such activities with the approval from the government.”
China seems really committed to this ban and it looks like it’s not going to change anytime soon.
Do you think there’s even the slightest chance China will ever change this policy? Are you pessimistic about the future of blockchain in China? Let us know your thoughts below.
Image courtesy of Lintao Zhang/Getty Images.
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Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
