After the news about China banning ICO fundraisers has spread throughout the world there has definitely been a certain amount of panic. Bitcoin and other cryptos tanked a bit (though already recovered by now 2 days after):
The rates have corrected even though too many news outlets have completely misinterpreted news from China, resorting to fear-mongering. Headlines like “China outlaws Bitcoin” have not been rare.
The governments, however, seem to be seeing an opportunity to make another advance on cryptocurrencies. Several central banks have issued warnings regarding ICOs in particular and cryptocurrencies in general. For instance,
- Hong Kong Securities and Futures commission has issued a warning that trading ICO tokens on crypto stock exchanges may be classified as security trading. As a result all the ICO-related activities may be subject to local licensing and conduct requirements. What happens next is not clear, but the warning emphasizes that all ICOs may be subject to strict inspections.
- Russia’s Central Bank has issued a warning about ICOs and cryptocurrencies, emphasizing the amount of risk they carry for the investors. ICOs are called “a form of attracting citizens’ investments” and said to easily cause financial damages without proper protection or litigation mechanisms. The bank is pretty much re-stating its’ 2014 warning that concerned Bitcoin, asking Russians to be aware of the high risks. It’s worth noting, however, that the Central Bank is not the financial regulator in Russia.
Coin Vigilance perspective:
Governments are quick to ban and they hate any kind of risk. These statements, including China’s ICO ban, are addressing the shadiest pump-and-dump ICO schemes. Remember that ICOs are not representing all of cryptocurrency scene. Pay attention to the upward trends and how little the correction was. Stay vigilant!