The National Bank of China (NBC, the country's central bank) reported the illegality of the STO program’s tokenToken
– is an accounting unit that is used to represent a digital balance in an asset.Details offerings in the country – as reported in South China Morning Post (SCMP), the local English-language news publication, December 9th.
Pan Gongsheng, Deputy Governor of the Central Bank of China, reported his dissatisfaction through the functioning of the primary coin offerings.
He stated at a summit in Beijing that "illegal" financial activities through STO and ICOICO
(Initial Coin Offerings) is an acronym, which means a primary currency offer. Details (primary offers of coins) still flourish on the mainland, despite the nationwide clearing of the cryptocurrency market the last time a year.
STO in China
Gongsheng also said that if the government had not intervened, a chaotic cryptocurrency market could damage overall financial stability in China. The representative of the central bank noted that the STO business, which had recently emerged, is still an illegal financial activity in China.
Gongsheng also confirmed the position of the bank that cryptocurrency is associated with criminal activity:"Virtual money became intermediaries (accomplices) of all types of illegal and criminal activities of the country" – Pan Gongsheng.
As reported by the South China Morning Post, Gongsheng said that most financial transactions conducted through the ICO in China were suspected of illegal fundraising.
Among the options stated are pyramid-type sales schemes, money laundering, raising money for illegal enterprises, and other financial fraud.
The article also mentions that Huo Xuewen, the head of the Bureau of Financial Work of China, warned against cooperating with STO about a week ago.
"I want to warn those who are promoting fundraising from STO in Beijing. Do not do it on the territory of Beijing (...) you will be expelled not only from the city, but also from the country, if you do this" – Huo xuewen.
The Central Bank of China declared the STO illegal in the country, but this decision is not enshrined at the legislative level of the country. At the moment, restrictions apply only in Beijing.
Editor: Alyona Nabok