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China’s NIFA warns against engaging in overseas ICOs

Following the ban on initial coin offering (ICO) activities in China issued last year, the National Internet Finance Association (NIFA) has issued a warning against participating in overseas ICOs and virtual currency transactions.

NIFA is a national self-regulatory organization in the field of internet finance and is initiated by the People’s Bank of China in collaboration with relevant ministries and commissions.

Noting that some domestic investors have turned to overseas activities following the nationwide ban, NIFA said (loosely translated):

“[I]t is necessary to point out to investors that due to the widespread lack of norms in the international arena, current overseas trading platforms have the same risks as system security, market manipulation and money laundering.”

The agency noted that governments across the globe are strengthening the regulation around virtual currencies and ICOs, adding some of the platforms offering such services may be forcibly banned or restricted by the host government due to compliance issues.

“In this context, domestic investors will face certain risks in moving to overseas platforms to participate in the transaction,” it added.

NIFA urged investors to recognize the risks of overseas ICOs and virtual currency trading platforms and firmly establish the risk prevention awareness.

Earlier this month, NIFA issued a warning on disguised ICO activities going on the country.

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