China Goes After the Cryptocurrency Market with ICO Ban

Last week, the value of crypto tokens OmiseGO (OMG) and Qtum passed the $1 billion mark, making them the first initial coin offering (or ICO) unicorns on the Ethereum market. Seattle FinTech app developers with their fingers on the pulse of the crypto market knew that this day would come, but it has happened so fast. When OMG went on sale in July (yes, this July), each token was worth $0.27. Now it is up to $11. Since March, Qtum tokens ballooned from $0.30 to $17. Maybe it’s time for crypto skeptics to reconsider. After all, ICO fundraising has cleared $1.6 billion in 2017 so far. For anyone who wasn’t convinced before, it should be clear that cryptocurrencies are serious business.

Part of what draws FinTech app developers to cryptocurrencies is the promise that they could disrupt traditional financial institutions and the established economic order. For that reason, governments find it dangerous — especially the Chinese government, which decided yesterday to ban ICOs. A committee headed by the People’s Bank of China has declared ICO funding illegal, citing worries about pyramid schemes and other scams. At least that’s the official excuse. ICO.age and ICO.info, two of the major ICO fundraising platforms in China, have voluntarily closed up shop to comply with the government’s demands.

Last month, the central bank of Singapore made a statement linking bitcoins to terrorist funding and money laundering. For governments who feel their institutions are threatened by cryptocurrencies, tying anonymity to criminal activities makes ICOs seem even riskier. China’s ban comes at a critical time for cryptocurrencies; the country was a huge player in the current crypto boom. FinTech app developers aren’t even sure how cryptocurrencies can be regulated. If the Chinese regime can figure out a way to reign in ICOs, let’s hope the SEC, which has taken a decidedly anti-crypto stance, doesn’t follow suit.