China Announces Ban On Initial Coin Offerings
This last weekend has been a bittersweet experience for cryptocurrency investors. Bitcoin’s price went up to $5,000 which is a new milestone in the cryptocurrency market. Therefore, everyone started withdrawing money which caused the currency’s value to drop down by 5%. In addition, Ethereum’s value also dropped by 8%. Nonetheless, things don’t end here since China just announcec today that it banned ICOs.
China Bans ICOs
Starting today (September 4th), China officially banned ICOs. This means that individuals and organizations who raised funds through ICOs (initial coin offerings) are not allowed to do it anymore. The reason why China banned ICOs is because it believes the practice constituted illegal fundraising. Moreover, ICOs are highly popular in China and large numbers of entrepreneurs are using them in order to raise money for their projects. The thing that China dislikes the most about this practice is that there’s no regulatory oversight.
China announced that individuals and organizations that started and completed ICO fundraisings should start returning funds. This statement comes officially from the People’s Bank of China and banking regulators alongside other government departments. In addition, this statement can also be seen on the central bank’s official website.
Bitcoin and Ethereum Price Drop
Obviously, China’s ban on ICOs is something that’s going to make some big changes in the cryptocurrency market and this is exactly what happened. As previously mentioned, Bitcoin’s price declined by 5% while Ethereum’s price also went down by 8%. Things get even worse though since the entire global cryptocurrency market also declined by 11% percent which accumulates to $20 billion lost over the weekend. Sadly, things are not looking great for cryptocurrency investors and most experts are advising everyone to start selling their Bitcoin and Ethereum units before it’s too late.