Initial Coin Offerings Are Illegal in China

Yesterday, China announced that Initial Coin Offerings, or ICOs, are illegal and began to investigate dozens of cryptocurrency platforms. This comes only weeks after authorities in the USA and Canada indicated that cryptocurrencies are securities and are therefore subject to regulation.

This is bad news for the cryptocurrency industry. While the price of Bitcoin, the largest virtual coin, dropped since the news broke, investors should be even more concerned with the long-term viability of the entire sector. As I noted in August, the differences between cryptocurrency enthusiasts (who praise anonymity) and government regulators (who demand transparency) are likely too big to reconcile. For that reason, they will probably always be a fringe, and often illegal, commodity.

I believe we will continue to seek crackdowns on coin offerings and coin exchanges. China’s announcement is only the beginning. That is one of many reasons for why I think cryptocurrencies are poor investments.

Read more: Which Cryptocurrency to Invest In: How to Choose the Best Virtual Coin

About The Author

Alexis Assadi

Alexis Assadi is an investor, entrepreneur and writer, who advocates for making high-performing income investments and the lifelong pursuit of financial intelligence. He is a shareholder and director in three companies that provide funding to small businesses, entrepreneurs and real estate projects. His most recent venture is a firm called Pacific Income LP.

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