We all know that news that comes of out of China is particularly relevant for cryptocurrencies. This has been the case for a number of years as rumblings about Chinese regulation have sent prices into tail spins.
Last year, China made the move to ban ICOs on the basis that it was an unauthorised way to raise money under the country’s laws. All projects were ordered to return funds to the investors.
What then followed was a range of crypotcurrency bans as Chinese exchanges closed down. This sent Bitcoin and other cryptocurrencies into a dive which eventually recovered.
Now, there are some rumours which are floating around that China may be considering the unbanning of these ICOs. Is this light at the end of the regulatory tunnel or is it more of the same speculation?
Let’s take a look…
New Regulations Considered
According to the vice president at China’s People’s University of Law, Yang Dong, there are new regulations that are in the pipeline. These are supposedly going to be communicated later this year.
The comments were made at the South East Asia Blockchain summit where Mr Yang Dong was speaking. This is a well-known summit for those in the cryptocurrency community in Asia. Mr Yang Dong, who leads the Centre of Financial Technology said
Good ICO projects are allowed to develop in a legal and risk-controlled environment rather than simply adopting a one-size-fits-all approach. The China Securities Regulatory Commission may launch equity crowdfunding pilot program in the near future, which will be an opportunity for ICO to get in compliance.
He also said that he believes that there will still be control over the OTC markets as well as the centralised exchanges. He claimed that the regulation would try and ward off all of the “bad” ICO projects in favour of the “good” ones.
Contrary to Actions
Although many are hoping that this view could be borne out by fact, one would be disheartened by the evidence to the contrary. Not only has China banned cryptocurrency trading but they are also closing down miners.
Similarly, on the ICO front there are other countries that are also looking to actively regulate or restrict them. For example, it was recently announced that South Korea was banning ICOs for similar reasons to those given by the Chinese.
Hence, it is quite hard to verify the claims that have been made by Mr Yang Dong. If there is one thing that those involved with cryptocurrencies love it is to speculate around potential news stories.
However, if it is true that China will be lifting the ban, then one would expect to see a rally in the price of select cryptocurrencies. For example, NEO (Antshares) is likely to see a massive rally as this was the prominent coin used for those purposes.
The most prudent thing to do at this moment would be to keep a steady eye on the news feeds and take every unofficial statement with a pinch of salt.
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