China’s security token offering Regulation

Security Token offering

The bullish trend attracted numerous investors chasing for ICOs last year. With China being one of the large markets involved, it must have been concerning to the world market when the Beijing authority issued the “Announcement on Preventing the Financing Risks of Initial Coin Offerings” back in September 2017.

The announcement regarded ICOs, as a form of unapproved and illegal public fundraising, such financing activities which would ultimately be eradicated in the mainland. Following the ban on exchanges and crypto-related advertising in Beijing and Shanghai, cryptocurrency appeared to be approaching a dead end in China, by the hands of the Chinese government.

STO serves as the new hope for the market, with its compliance to Know Your Customer (KYC) and Anti-Money Laundering (AML). However, Huo Xuewen, the Director of Beijing Municipal Bureau of Local Financial Supervision, warned that STOs are illegal financing activities in Beijing, until given approval from the government.

Clearly, the authority is skeptical about cryptocurrencies, which means no good news for crypto. With no further information, the deadlocked market will still continue.


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