China bans initial coin offerings as illegal fundraising

People's Bank of China orders individuals and organisations that have completed ICO fundraisings should make arrangements to return funds

BEIJING: China's on Monday banned individuals and organisations from raising funds through initial coin offerings (ICO), saying the practice constituted illegal fundraising.

ICOs have become a bonanza for digital currency entrepreneurs, globally and in China, allowing them to raise large sums quickly by creating and selling digital "tokens" with no regulatory oversight.

Individuals and organisations that have completed ICO fundraisings should make arrangements to return funds, said a joint statement from the People's Bank of China, the securities and banking regulator and other government departments that was posted on the central bank's website.

The popularity of coin offerings has surged in China this year, with 65 ICOs and 2.62 billion yuan ($394.6 million) raised from 105,000 individuals in the country, state-run Xinhua reported in July, citing data from a government organisation that monitors online financial activity. - Reuters