No, thank you.
Despite the digital securities sector’s rapid development, with on-going global acceptance being witnessed, China has taken a firm stance against the industry. They have just released a new document containing not only their stance on the industry, but risk tips for investors looking to avoid scams.
This stance towards utilizing blockchain as a means of revolutionizing fundraising, comes in stark contrast to the nation’s past acceptance of the technology. China has been noted, over past years, to have implemented blockchain in various industries ranging from mobility to supply chain management.
An Easy 1, 2, 3
In this newly released document, the Beijing Internet Finance Industry Association closes their communication by indicating that their stance has been taken with a goal of creating a ‘positive and healthy financial ecological environment.’ With this in mind, they elaborate with three points, to ensure the safety of investors. The following are their paraphrased words of caution:
- All relevant institutions and individuals in Beijing, strictly abide by national laws, and jointly resist and prevent illegal fund-raising and dissemination activities in the name of “virtual currency”, “Blockchain”, “ICO”, “STO”, “Stable coin”, and other variants.
- Beware of wrongdoers using sophisticated names such as IFO, IEO to issue tokens, or under the banner of “sharing economy”, “evidence economy”, “crowdfunding”, “consensus economy” and so on, leading virtual currency hype.
- Retain a rational view of the blockchain. Do not blindly believe in the promise and hype. Establish a correct understanding of money and investment ideas, and effectively improve risk awareness.
The aforementioned document, discussing the financial body’s stance on STOs, should come as no surprise. This is because this is not the first time the public has been cautioned about these fundraising methods. The document echoes the stance expressed by, not only the People’s Bank of China, but the Ministry of Public security, as well.
Only months ago, we were reporting on the Beijing Municipal Bureau of Finance taking a firm stance against STOs. At the time, Chief of the MBF, Huo Xuewen, stated, “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.”
In Other News
While the news discussed here today may be disconcerting, it is important to note that China remains an outlier. While there are many nations that have simply not established regulation towards STOs, there is an increasing amount that welcome them. Here are a few articles detailing STO friendly countries and their recent developments.