The People’s Bank of China (PBoC) has recently deemed security token offerings (STOs) as illegal in the country, adding one more ban to its list.
China has always had a bit of a penchant for crypto bans. Who could forget the infamous events of September last year when the powers that be in the country decided to prohibit crypto trading? Now, according to the South China Morning Post, the country has issued yet another ban.
China Says No to STOs
This time, it comes from the People’s Bank of China (PBoC) and it has to do with security token offerings (STOs). A deputy governor of the bank, Pan Gongsheng, has advised that STOs are “illegal” but even so, are still be used to raise funds in the country. He said:
The STO business that has surfaced recently is still essentially an illegal financial activity in China. Virtual money has become an accomplice to all kinds of illegal and criminal activities.
Pan also took the opportunity to further disparage the crypto industry as a whole by stating that it is a conduit for financing illicit activities and that it is used to aid a number of financial fraud schemes.
However, while we’re talking about crypto in Asian countries, Japan recently reported some interesting findings. While money laundering cases have increased in the country since last year, only 2% of those can be linked to crypto. This definitely goes against the often repeated, but seldom supported claim, that virtual currencies are the stuff that financial fraud dreams are made of.
Say Goodbye to Beijing If Launching an STO
Pan’s comments come in the wake of another authority warning against using STOs to launch or grow platforms. Huo Xuewen, who is the chief of the Beijing Bureau of Financial Work previously said:
I want to warn those who are promoting STO fundraising in Beijing. Don’t do it in Beijing. You will be kicked out if you do it.
It’s not just government authorities who have something to say about the industry. Cao Hua, who is a partner with private equity group United Asset Management, added:
The regulators will continue to strengthen regulation in the financial technology market to ensure financial stability. New business models in the financial technology sector are not welcome in China now.
However, one technology that is being welcomed is blockchain. China is one of the countries that have embraced it through adoption as well as through providing funding for the growth of it. It is doubtful that it will continue to flourish unchecked though. It has previously been reported that China has plans to regulate blockchain technology in the country.
What do you think of China’s latest crypto-related ban? Let us know in the comments below!
Images courtesy of Pixabay