The start-up bitcoin sector has been tossed into chaos as China made a move of banning ICO, whereby causing the industry to come to abrupt halts and ‘re-think’ the strategy of raising “money through the novel fund-raising scheme”.
China is attacking the “bonanza for digital currency entrepreneurs” that has popped up this year in the form of ICO which has fuelled up the “value of cryptocurrencies” alongside with “fears of a potential bubble”. Commenting on the sensitive issue, a Shanghai based “venture capital” fund’s partner said:
“This is not unlike the dotcom bubble of 2000. There are a lot of companies raising a lot of money for not very good ideas, and these will eventually be weeded out. But even from the big dotcom bust, you still have gems.”
“One of the reasons regulators stepped in was that the ICO fever extended beyond the traditional crypto community. The timing was an attempt to pre-empt this before it goes into a much broader mass market in China”.
Chinese investors’ contribution to cryptocurrencies’ sector “through ICOs” amount to “2.6 billion yuan ($394 million)”. The said sum was collected within the period of January to the month of June, as a media reported stated by citing from “National Committee of Experts on Internet Financial Security Technology data”. With China’s focus shifting to “economic and social stability ahead of next month’s congress of the Communist Party”, came the “subsequent crackdown”.
Moreover, Beijing has plans of holding a bigger campaign to protest against “fraudulent fundraising and speculative investment”, as the analysts sees this step of China as its “underdeveloped financial regulation and lack of legitimate investment options”.
The move of China, claimed “several start-ups”, has confused the panic stricken investors, whereby making an “exuberance” that became difficult to “control”. Singpay’s Mi Huijin, gathered a “popular live-stream channel” and addressed the followers:
“Everyone shouldn’t panic. If you’ve nothing to be guilty of what’s there to be scared of? After reviewing the regulations, I feel it’s a good thing.”
However, everyone wasn’t “convinced” by Huijin, as some demanded for refund from Singpay. While, Reuters reported:
“China’s position - which differs from regulators elsewhere, who say ICOs may be securities and thus subject to regulation - remains open to interpretation.”
The China Academy of Social Sciences’ Deputy Director, Hu Bin thinks that this move is a “stop on ICOs, not a ban. What are we stopping? Illegal ICOs.”
Moreover, another blockchain company based out of Silicon Valley, BitClave’s Alex Bessonov, said:
“It’s entirely proper for the Chinese government to seek protection for consumers and prevent fraud, (but) confining capital raising to a specific established sector of finance ... is to ignore the enormous societal value that blockchain technology can present”.
Similarly, Selfsell’s chief executive officer, Li Yuan, looking to create a retail investors’ platform, informed about the cancellation of a “planned” ICO for which he returned “all pledged coins”. While, the ICOs that have already been “conducted” poses “more complicated” situations. There are others who said they cannot “force people to exchange their tokens as they would lose out at bitcoin’s current rate” following the announcement made by the government. In the words of Neo’s Founder, Da Hongfei:
“We offer the option, but we can’t point a gun at the user and ask them to refund”.
It becomes difficult for tokens “already trading on the secondary market” to be recalled, while, the Founder of another blockchain start-up, Daniel Wang, added:
“Many people have not been very discerning on whether the project is actually good or bad”.
However, there are “other options” for “raising funds”, as the VCCoin’s C.E.O, Xiaoning Li, added:
“We have angel investors. We will probably still do an ICO, but have to look at where and how to do it”.
Pointing at the markets of Canada, the U.S. and Singapore, another blockchain platform’s Co-Founder informed about “re-thinking their strategy outside China”, whereby shifting their focus on the “markets which are not banning ICOs, but rather trying to put in place higher standards and regulatory supervision”.
References:
reuters.com
China is attacking the “bonanza for digital currency entrepreneurs” that has popped up this year in the form of ICO which has fuelled up the “value of cryptocurrencies” alongside with “fears of a potential bubble”. Commenting on the sensitive issue, a Shanghai based “venture capital” fund’s partner said:
“This is not unlike the dotcom bubble of 2000. There are a lot of companies raising a lot of money for not very good ideas, and these will eventually be weeded out. But even from the big dotcom bust, you still have gems.”
“One of the reasons regulators stepped in was that the ICO fever extended beyond the traditional crypto community. The timing was an attempt to pre-empt this before it goes into a much broader mass market in China”.
Chinese investors’ contribution to cryptocurrencies’ sector “through ICOs” amount to “2.6 billion yuan ($394 million)”. The said sum was collected within the period of January to the month of June, as a media reported stated by citing from “National Committee of Experts on Internet Financial Security Technology data”. With China’s focus shifting to “economic and social stability ahead of next month’s congress of the Communist Party”, came the “subsequent crackdown”.
Moreover, Beijing has plans of holding a bigger campaign to protest against “fraudulent fundraising and speculative investment”, as the analysts sees this step of China as its “underdeveloped financial regulation and lack of legitimate investment options”.
The move of China, claimed “several start-ups”, has confused the panic stricken investors, whereby making an “exuberance” that became difficult to “control”. Singpay’s Mi Huijin, gathered a “popular live-stream channel” and addressed the followers:
“Everyone shouldn’t panic. If you’ve nothing to be guilty of what’s there to be scared of? After reviewing the regulations, I feel it’s a good thing.”
However, everyone wasn’t “convinced” by Huijin, as some demanded for refund from Singpay. While, Reuters reported:
“China’s position - which differs from regulators elsewhere, who say ICOs may be securities and thus subject to regulation - remains open to interpretation.”
The China Academy of Social Sciences’ Deputy Director, Hu Bin thinks that this move is a “stop on ICOs, not a ban. What are we stopping? Illegal ICOs.”
Moreover, another blockchain company based out of Silicon Valley, BitClave’s Alex Bessonov, said:
“It’s entirely proper for the Chinese government to seek protection for consumers and prevent fraud, (but) confining capital raising to a specific established sector of finance ... is to ignore the enormous societal value that blockchain technology can present”.
Similarly, Selfsell’s chief executive officer, Li Yuan, looking to create a retail investors’ platform, informed about the cancellation of a “planned” ICO for which he returned “all pledged coins”. While, the ICOs that have already been “conducted” poses “more complicated” situations. There are others who said they cannot “force people to exchange their tokens as they would lose out at bitcoin’s current rate” following the announcement made by the government. In the words of Neo’s Founder, Da Hongfei:
“We offer the option, but we can’t point a gun at the user and ask them to refund”.
It becomes difficult for tokens “already trading on the secondary market” to be recalled, while, the Founder of another blockchain start-up, Daniel Wang, added:
“Many people have not been very discerning on whether the project is actually good or bad”.
However, there are “other options” for “raising funds”, as the VCCoin’s C.E.O, Xiaoning Li, added:
“We have angel investors. We will probably still do an ICO, but have to look at where and how to do it”.
Pointing at the markets of Canada, the U.S. and Singapore, another blockchain platform’s Co-Founder informed about “re-thinking their strategy outside China”, whereby shifting their focus on the “markets which are not banning ICOs, but rather trying to put in place higher standards and regulatory supervision”.
References:
reuters.com
