PBoC Cracking Down Hard on ICO’s – What’s next?

It’s official. Chinese Regulators are after ICO’s and it going to get ugly…

According to recent reports, an anonymous source close to the PBoC has been studying ICO’s and have concluded that:

“More than 90% ICO projects could be violating illegal fundraising or fraud fund laws. The percent of the projects that is actually raising funds for investments is less than 1%”

Regulations for ICO’s coming is no surprise, what is most alarming is the strongly written assessment and the potential impacts to projects from China that have recently completed their ICO’s. Red Pulse was intelligent enough to ban Chinese Nationals from participating so while I see little risk for them, others remain in question.

To put this in perspective, as of early August there were 43 platforms providing ICO in China. Chinese ICO’s have raised an estimated US$420 million. The majority of these platforms (roughly 60%) are located in Guangdong, Shanghai and Beijing. The report goes on to indicate further than even the ICO’s that have been cleared of illegal fundraising still could have violated fraud laws.

In anticipation of this report and the PBoC’s ongoing ICO review, the September 2nd conference devoted to ICO’s in Beijing was cancelled. Questions will now focus on the future of any ICO’s in China. To this point, no indication from the PBoC has been made on the value of token sales for startup projects.

ICOINIFO has already suspended all ICO offers as well as all ICO platforms adding a huge blow not only to Chinese investors looking to cash in on the latest ICO offerings but to these aspiring projects well.

So, what are the most promising projects in the crosshairs of this ICO review? The first promising project that I see is Loopring.

Loopring is an aspiring decentralized exchange designed on the Ethereum blockchain. With backers like Neo Council, Qtum Foundation, Fintech Blockchain Group and others this promising project may be tied up answering questions on its recently completed ICO rather than development for some time. US$45 million was raised in less than two days from an ICO that mostly flew under the radar.

PressOne is another ICO that raised US$85 million during its ICO. Launched on the EOS blockchain, PressOne had many questions from inception. From the lack of a complete whitepaper to calls that the project itself was too ambiguous and ambitious this ICO seemingly would also be in the crosshairs of the PBoC regulators.

We clearly are in the bear season for Chinas' ICO’s. Projects that are not lock in step with government regulators in any country run the risk of serve penalties and even possible jail time. For the investor, this is longterm good news. Gone will be the copy and paste whitepaper ICO’s, gone will be the projects launched in Mom’s basement with promotional videos recorded via handheld iPhone 6’s. Incoming, we have clear direction and a path to legitimacy for blockchain technology. This will usher in mass adoption. Until we see the end, the road will be unclear, highly sensitive and not for the weak hands.

~CryptoJayson~

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