People's Bank Of China Offers Translated Guidance On Token Offerings

Friday, September 8, 2017, the People's Bank of China (PBoC) released an English statement that clearly states the position it took on Monday, regarding token offerings (called coin offerings or ICOs).

In the official public notice, the PBoC identifies what it refers to as "Essential Attributes of Fundraising Through Coin Offering." It makes note that virtual currencies are not issued through a monetary authority and, as such, lack the characteristics of legal tender, so they cannot be circulated as currency. The PBoC also forbids organizations and individuals from engaging in "Illegal Fundraising through Coin Offering." The announcement states, "From the date of release of this Notice, fundraising through coin offering shall be banned immediately. Any individuals or organizations that have completed fundraising through coin offering shall make arrangements to return the funds raised, and to ensure that the legitimate rights and interests of the investors are protected and the risks involved are properly managed."

The bank also restricted the exchange of fiat currencies for cryptocurrencies. It said:

"From the date of release of this Notice, any so-called platform that provide trading and exchange services for coin offering shall not engage in exchange businesses between legal tender and token or 'virtual currency'; or engage in proprietary trading activities or trading as an central counterparty of tokens or 'virtual currencies'; or provide pricing services or act as information intermediary for tokens or 'virtual currencies.'"
PBoC maintains that any trading platforms in violation of laws or regulations may have their websites and mobile applications shut down by the administrative department in charge of telecommunications. It reminds the public to be aware of risks and take steps to properly identify the indicating factors of any illegal financial activities, and invites citizens to report any illegal activities in a timely manner.

Embedded in this article is the full announcement.