China C-Bank Issues Fresh Warning on Crypto, ICO Risks

The People’s Bank of China (PBoC) has reminded investors of the risks associated with virtual currencies and ICOs.

Through its Shanghai branch, the People’s Bank of China (PBoC) issued a public warning on Tuesday, reminding investors about the risks associated with cryptocurrency trading and initial coin offerings (ICOs).

"[ICOs are] suspected of illegally selling tokens, illegally issuing securities, illegal criminal activities, financial fraud, pyramid schemes, and other illegal and criminal activities," says a roughly translated excerpt from the announcement.

As admitted by the PBoC, however, Chinese investors have continued to trade virtual currencies on offshore platforms. Media reports surfaced last month that exchanges have been bypassing the ban by frequently changing their domain names to remain undetectable. Chinese cryptocurrency investors have also been found to use Tether (USDT) and virtual private networks (VPNs) to go around government rules.

The central bank added that it was keeping a close eye on offshore servers associated with up to 124 cryptocurrency trading platforms in an effort to maintain control over the sector. The increased oversight includes various methods such as “cleaning up” payment channels and strengthening their ability to monitor financial transactions.

"In addition, it [the internet authority] has also strengthened the disposal of domestic ICO and virtual currency transaction related websites, public numbers, social media etc., and permanently blocked some public numbers suspected of releasing ICO and virtual currency trading hype information," the PBoC said.

Despite their firmly negative stance on cryptocurrencies and ICOs, Chinese authorities seem to remain bullish on the technology behind them. The Supreme People’s Court of China said earlier this month that blockchain can now be used to authenticate evidence in legal disputes in the country. Recent research also shows that some 68% of global blockchain-related patents come from China-based companies.