Under the impact of the Chinese government’s recent formal notices of halting ICOs, Notice 99 and Joint Notice released on September 2, 2017 and September 4, 2017 respectively [1], Beijing authorities have taken further actions and held meetings with Beijing-based trading platforms with regard to a trading halt on September 15, 2017, following Shanghai’s “verbal notice” of a trading halt and the Shanghai-based exchange BTCChina’s sudden announcement of a halt to its trading on September 14, 2017.
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China Halts ICOs and Token Sales and China-Based Trading Platforms Suspend Trading Amid Reports of Additional Government Restrictions
The government of the People’s Republic of China (PRC) has formally announced a suspension to all ICOs and token offerings and financing activities by releasing two notices, namely, the Notice of Seven Ministries Including the People’s Bank of China on Guard against Risks of Token Offering and Financing (Joint Notice) and Notice on the Rectification of Token Offering and Financing Activities (Zheng Zhi Ban Han [2017] No.99)( Notice 99). Further, there is speculation that formal government action suspending virtual currency trading platforms is imminent, which has already caused major China-based trading platforms to suspend their activities.
In the two formal notices, the Chinese government has identified initial coin offerings (ICOs) as essentially an unapproved illegal public financing highly suspected of facilitating illegal fund-raising, illegal securities offerings, illegal offering and sale of tokens, financial fraud, and pyramid schemes. Accordingly, these documents provide that all types of token offering and financing shall come to a halt. The organizations and individuals who have completed the token offering and financing should plan to withdraw and make other arrangements, protecting the interests of investors and handling the risks properly.