China’s southern Hainan province is the latest to warn investors against crypto-based fundraising schemes.
Following China’s major regulatory crackdown on cryptocurrencies,
financial regulators in Hainan, the smallest province in the country,
reportedly issued a warning against crypto- and blockchain-focused
illegal fundraising schemes.
According to local reports, the
Hainan branch of the People’s Bank of China — the central bank of the
country — and the local financial supervisory authority were among the
regulators that made the announcement.
Regulators
warned investors about illegal fundraising campaigns that use digital
currency or blockchain as promotion material, stating that illicit token
issuance and financing activities are forbidden.
“Any so-called
token financing platform shall not engage in the business of exchange
between legal tender and tokens or virtual currencies,” regulators
noted, simply meaning those token financing platforms can’t be used as
fiat-to-crypto gateways. It’s also forbidden for said platforms to buy,
sell or act as an intermediary to buy or sell tokens, the report says.
The
warning also encompasses financial and payment institutions, banning
them from “directly or indirectly [providing] services related to
virtual currencies.”
Last month, the China Internet Finance
Association, the China Banking Association, and the China Payment and
Clearing Association issued a shared statement about the risks of trading cryptocurrencies.
After massive power outages in the Chinese mining hub of Xinjiang in mid-April, Beijing authorities focused on crypto mining data centers’ energy consumption. Several large-scale Bitcoin (BTC) miners have since announced their plans to cease operations in the country.
The regulatory notice regarding stricter supervision of Bitcoin mining aligned with Elon Musk’s U-turn on Bitcoin payments for Tesla,
causing a price crash for BTC and crypto markets in general. The
increased volatility of cryptocurrencies triggered a series of warnings
from central banks and financial institutions worldwide.
sourcelink : https://cointelegraph.com/news/southern-china-warns-investors-against-illegal-token-platforms
