Cybersecurity
China Just Completely Sidestepped One of the Biggest Issues Facing Cryptocurrencies
- The issue for regulators is deciding if tokens are securities
- Hong Kong joins U.S., Singapore in weighing in on tokens
Bitcoin Tumbles After China Halts Initial Coin Offerings
This article is for subscribers only.
With a blanket ban on initial coin offerings, China has sidestepped an issue plaguing regulators worldwide: are such tokens securities?
A cross between crowdfunding and an initial public offering, ICOs -- which have raised at least $1.25 billion globally so far -- are the sale of tokens based on the blockchain, the technology underlying bitcoin. While they at least ostensibly promise the holder access to the final product, making them more like vouchers, the problem for regulators is they also often bear the characteristics of regulated securities, especially when buyers are betting on capital gains.