Beijing Internet Finance Association: Guard against illegal public financing activities such as "STO" and "IEO"

Recently, some media, social platforms, and research groups have used "financial innovation" as a gimmick, issuing coins to attract money, and hyping up transactions as an inducement. They have used the names of "research" and "forums" to promote "ICO", "IEO", "STO", "stablecoins", "points coins", "digital currencies", etc., and have conducted various online and offline activities such as training, project promotion, and financing transactions. Such activities are not truly based on blockchain technology, but take the opportunity to hype the concept of blockchain, seriously disrupt the normal financial and economic order, and bring social risks.

On September 4, 2017, the People's Bank of China and seven other ministries and commissions jointly issued the "Announcement on Preventing Risks of Token Issuance and Financing", which clearly stated that "token issuance and financing refers to the financing entity raising so-called "virtual currencies" such as Bitcoin and Ethereum from investors through the illegal issuance and circulation of tokens. It is essentially an unauthorized illegal public financing behavior, suspected of illegal issuance of token tickets, illegal issuance of securities, illegal fundraising, financial fraud, pyramid schemes and other illegal and criminal activities."

In August 2018, the China Banking and Insurance Regulatory Commission, the Cyberspace Administration of China, the Ministry of Public Security, the People's Bank of China, and the State Administration for Market Regulation issued a "Risk Warning on Preventing Illegal Fundraising in the Name of "Virtual Currency" and "Blockchain"; subsequently, the China Internet Finance Association and the Beijing Local Financial Supervision and Administration Bureau also promptly issued relevant risk warnings.

Here, we solemnly remind all relevant institutions and individuals in Beijing that all financial businesses and activities must be brought under the scope of national supervision. Taking "STO" as an example, STO, Security Token Offering, is the issuance of securitized tokens. It is suspected of illegal financial activities. Groups involved in such activities will be subject to severe punishments such as expulsion, closure of website platforms and mobile apps, and revocation of business licenses.

In order to create a positive and healthy financial ecological environment and protect the legitimate rights and interests of financial consumers, the Association once again reminds you of the following relevant risk issues:

1. All relevant institutions and individuals in Beijing are requested to strictly abide by national laws and jointly resist and prevent illegal fundraising and dissemination activities in the name of "virtual currency", "blockchain", "ICO", "STO", "stablecoin" and other variants.

2. Be vigilant against criminals issuing tokens under the names of IFO, IEO, etc., or hyping virtual currencies in the form of IMO under the banner of "sharing economy", "token economy", "crowdfunding", "consensus economy", etc.

3. Please treat blockchain rationally, do not blindly believe in exaggerated promises, establish correct monetary concepts and investment ideas, and effectively enhance risk awareness.

Beijing Internet Finance Industry Association

March 21, 2019

Source: Beijing Internet Finance Industry Association

Original title: "Risk Warning on Preventing Illegal Financial Activities in the Name of "Virtual Currency", "ICO", "STO", "Stablecoin" and Other Variants"