Executives React to China’s ICO Crackdownbr>
The initial coin offering (ICO) market was thrown into flux Monday with the stunning announcement from China that ICOs were now banned in that country. Combined with the added scrutiny and paperwork being required by the US Securities and Exchange Commission and its Canadian counterparts, the heretofore robust ICO market is now faced with new challenges that may, at least temporarily, put the brakes on the new form of financing.
Chinese press agency Xinhua reported earlier this year that 65 ICOs worth 2.62 billion yuan ($394.6 million) had been raised from 105,000 individuals in the country.
So far this year, a worldwide total of $1.51 billion USD has been raised through ICOs, according to the Coinschedule.com website tracking. That far exceeds the $96.3 million in ICOs for all of 2016, and also has surpassed earliest-stage angel and seed venture capital issued this year.
Block Tribune asked the executive network to react to the recent developments and speculate how the new regulatory pressures may influence the ICO market.
Edward Weinhaus, Co.in Group Chairman and UCLA Anderson School of Management Lecturer in Entrepreneurship: “We treat ‘ICO’ as an established acronym. China’s move highlights that if you think you know what an ICO is today and issue one, you risk legal penalty here and elsewhere. Nonetheless, as a means of raising capital, there is nothing more efficient.”
Lon Wong, President, NEM.io Foundation: “The recent clamp down of ICOs in various jurisdictions is stifling the FinTech industry.”
Pavel Vrublevsky, founder, ChronoPay.com: “I think what is going to happen is that ICOs will change a bit more towards reality. At this stage, ICOs represent around 1% of total crypto cap and therefore are basically an R&D and marketing crowdfunded budget. All these regulations just merely clearly show that pure hype won’t work or last long.”
Nick Evdokimov, founder, ICOBox, CEO of Cryptonomos: “We understand and respect the decision of the Chinese authorities. At the same time, we recognize that it may very seriously affect our Chinese colleagues, which is regrettable. It is still too early in the game, but we expect that the newly enacted Chinese ICO ban may have a huge impact on domestic actors, who will be forced to seek the help of global agencies to conduct their ICOs.”
Matthew Spoke, CEO of Nuco: “It’s important that regulators be aware of the developments in this industry. But it’s also equally important that they not over-regulate a maturing technology. The actions in China will simply serve to make their blockchain startups less competitive globally, and that’s unfortunate.”
Elad Kofman, Co-Founder of bitJob: “In our eyes, regulations are needed in the cryptocurrency world. We must drive the blockchain gospel to the masses, and therefore we see the Chinese regulator decision as a long term planning – a blessed effort towards transparency and peace of mind for everyone involved.”
Reeve Collins, CEO at BLOCKv: A wise man once said: Invest in what China bans. Given the Chinese bans of Facebook and Google (and those companies’ subsequent wild growth and success), it would appear this advice is valid. The list of Chinese bans seems congruent to a list of highly profitable investments. Nevertheless, I think the Chinese will eventually come around and allow ICOs once they determine what format of sale they prefer. China won’t want to miss out for too long.