Report: China Regulators Considering New ICO Limitsbr>
A Chinese news service is reporting that China’s regulators have met to discuss growing concerns about the initial coin offering (ICO) market.
China’s regulators have been scrutinizing cryptocurrency and its exchanges since late last year, increasing the pressure in early January by limiting withdrawals at the exchanges and raiding several businesses to make sure they were complying with money-laundering rules. The country has also been limiting foreign investments by some of its high-flying companies in what many observers believe is concern over a cooling domestic economy.
According to the Chinese language report at Tencent Finance, a meeting led by the People’s Bank of China (its central bank), the China Securities and Futures Commission, and the China Banking Regulatory Commission are considering new ICO regulations.
The report contends regulators will consider suspending all domestic ICOs while it develops more stringent guidelines.
Earlier this month, China announced that it will limit its domestic companies from future foreign investments in a range of intellectual properties and companies, citing concerns over rising debt levels.
China’s State Council, effectively its national cabinet, issued a declaration that limits overseas investments in entertainment, hotels, cinemas, real estate, and sports teams, and outright bans investments in sex and gambling properties. The crackdown dries up a strong pool of capital that has been particularly active in international investing over the last five years, including in blockchain and cryptocurrency companies.
The cooling Chinese economy has led to a general clamp-down on capital outflows in China over the last year. As domestic Chinese companies like Wanda, Anbang Insurance, Fosun International and HNA Group have become major players in debt-driven foreign investments, it created concerns for the tightly controlled Chinese government economic stewards that too much capital was going to markets outside its own. How this affects existing investments is unclear at the moment.
Instead of overseas investments, the State Council statement last week urged a focus on the “Belt and Road” project, a state-driven infrastructure plan to link China with other parts of Asia and Eastern Europe through highways, railways and utilities.
“There are great opportunities for our nation’s companies to embark on foreign investment, but they also face numerous risks and challenges,” the State Council document said. The document went on to promote the “rational, orderly and healthy development of foreign investment while effectively guarding against risks,” it said.