Huo Xuewen, a chief of the Municipal Bureau of Finance, has made a statement regarding the replacement of initial coin offerings with the newly emerged concept of security token offerings, claiming that they are still considered unlawful within Beijing.
STOs exercise assets tokenization, allowing financiers to buy a share in the revenue gathered from such assets, which is something that coin offerings tried their best to go around by claiming that tokens were not a representation of revenue but rather utility tokens, and so on. For the majority of international financiers, STOs provide the best of both kinds of offerings through combination of the ICO’s liquidity, while remaining compliant with the regulations of the conventional financing vehicles. However, it looks like at present time security token offerings will be treated just as initial coin offerings are.
The central banking institution of China has previously forbidden any ICO activities and close a lot of cryptoexchanges in connection with it. The bank stated in October that the digital currency airdrops (also known as the free digital currency token giveaways) will also become scrutinized.
Pan Gongsheng, a vice president at the People’s Bank of China has previously stated that the bank had intentions to eliminate those initial coin offerings established outside of the China’s jurisdiction, which proceed in their solicitation of Chinese financing. Earlier in August, the government of China has also banned local organizations and businesses from taking part in any crypto-related events or promotions.