Not to worry because China is doing this for the financial well-being of investors who partake in these kind of investments and only for a short time.
This is want the South China Morning Post reported.
China ‘mulls crackdown on digital currency fundraising schemes’
SCMPChinaICOBan.png
Source: SCMP
China is not the only government who have “concerns” regarding the way ICO fundraising are conducted especially when they bypass the central bank, investment banks and stock exchanges and is subject to little regulatory scrutiny. The SEC in the US has also raised concerns at the way this ICO market is behaving in an “un-controlled” manner.
The Chinese government is preparing new rules on digital coin offerings and may ban them until the rules are in place, Chinese media outlet Caixin reported, citing unidentified sources.
They are doing this for our protection!
Analysts say a coin offering can easily turn into a Ponzi scheme if the underlying projects have no value and if rampant speculators push up the prices of offered tokens excessively high.
Anyone who participate in this fledgling market knows all too well that there are risks involved and for the Chinese government to take some kind of action now is telling you something.
The ICO mania has now caught the attention of the general masses and God forbid if there was to be an uprising as a result of one of these ICO being a scam. A headache the Chinese government does not want to deal with on its watch. So it is only prudent that the government takes action now rather then later.
PressOne recently raised US$82million dollars in their coin offering and with it come the fairly standard disclaimer,
The firm warned on its website that “this project has a certain risk of failure and furthermore, the tokens issued by the project could become worthless! Please invest with caution! Think carefully before you invest!”
As seasoned investor, those who are already in this space, these kind of warnings are the norm and usually taken with a pinch of salt. We all know the risks when getting into these schemes.
With Great Risk Comes Great Reward – T. Jefferson
Now it is different when it comes to the general masses and only one side of the equation registers in their minds. They only want the “Great Reward” but tune out the “Great Risk” that are associated.
When they are swindled they blame the government for not protecting them, so the government is now stepping in.
China knows the future is in digital or blockchain technology. They even have a central bank official who is leading the development of official digital coins in China. Yao Qian has said in a speech in June that the ICO market must be properly regulated.
[We] can treat it with tolerant prudence, but cannot let it develop at its free will - Yao Qian
Even seasoned investors in China are wary of ICO that are out there. Charles Xue, a renowned private equity investor, has put money into more than 20 of the coin offering projects in about 40 days, according to the report and he was quoted as saying that nine out of 10 ICO projects were not trustworthy in China “because of zero regulation”.
If you know the mindset of the Chinese people things can get out of hand very quickly. Once they see one person successfully doing it then it becomes a torrent and hundreds more will attempt to copy the success of the few before them. Situations like these can quickly spiral out of control and affect the lives of ordinary people who unsuspectingly walk into these “investment” schemes touted as the next best thing since sliced bread.
In China it is a really wild west scenario there and all investors should be careful of any ICO that are given an air of some respectability just because they have incorporated the word “blockchain” in their offering. Chinese investors are gamblers and anything to make a quick buck is game. ICOs are no different.
Just be aware when you are investing in these ICO because it may not what it seems and that is why the Chinese government is taking action.
I’m just letting off Steem, if you found this post informative then UPVOTE (with FULL POWER), COMMENT, FOLLOW and especially RESTEEM.
Live Long and Prosper
I wrote this article myself and it expresses my own opinions. Computer literacy is crucial in this day and age. Just because someone tells you it is good does not mean that it is good for you.
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