Chinese regulators on Monday declared initial coin offerings illegal, dealing a blow to the latest financial-markets mania, the Wall Street Journal reports.
Authorities decreed that fundraising activities through the digital tokens must “cease immediately”, the report said, adding that the news sent the prices of the two leading cryptocurrencies, bitcoin and ether, tumbling.
The regulatory move came as fears have grown about initial coin offerings, which have captured investors’ imagination like dot-com startups once did years ago, the Journal noted.
Coin offerings this year have raised nearly US$1.5 billion, up from US$256 million last year, the report said, citing research site CoinDesk.
Of offerings that have gained since their launch this year, the coins have jumped nearly 28 times in value, on average, according to data from research firm Smith & Crown.
But the latest market gold rush also has produced its share of duds. Of more than 100 coin offerings launched this year, 10 percent have declined in value and 30 percent haven’t traded.
The losses haven’t deterred some coin buyers, many of whom have made so much in other deals that they are eager to take more chances, the report noted.
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