Chinese regulators have launched a crackdown on sales of cryptocurrency-based fundraising schemes known as “initial coin offerings,” amid concerns that they are fuelling financial risk and outright fraud.
President Xi Jinping has called “financial security” a top policy priority this year, and regulators are concerned that ICOs are a magnet for scammers preying on the speculative fervour of Chinese investors.
The state-controlled National Internet Finance Association of China warned investors late on Wednesday to use caution before investing in such schemes. The rapid rise of ICOs has “thrown the social economy into disorder and created rather large risks and hidden dangers”, the group said, adding that some ICOs “have used various misleading promotional methods” and are “suspected of fraud”.