China has announced this Monday that it has banned and made the practice of raising funds through launches of token-based digital currencies illegal. China 's decision targets the the initial coin offerings since the beginning of the year.Reuters reported that in total, $2.32 billion has been raised through ICOs, with $2.16 billion of that being raised since the start of 2017, according to cryptocurrency analysis website Cryptocompare. 60 major major ICO platforms will be inspected by local institutions.
Cryptocurrencies have significantly declined in value as a result. The price of Bitcoin, the most popular digital currency, down about 8 percent, while the total value of all cryptocurrencies declined approximately 10 percent, according to industry website Coinmarketcap.com.
Zennon Kapron, director of the Shanghai-based financial technology consultancy Kapronasia, said according to Reuters, “Regulators globally are struggling to understand what ICOs are, what the risks are, and how to ring-fence and regulate them… China, in many ways, is no different than the U.S. or Singapore in saying, ok, we need to push back on these for now until we figure out how to deal with them…I think it will be slightly a temporary measure.”