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PBoC advisor calls for information disclosure requirements and moderate regulation for ICOs
Initial Coin Offering (ICO) continue to attract businesses and investors. Recent data suggests that the money raised by companies via this route already runs into millions of dollars.
Some of the most successful ICOs in recent weeks includes Tezos (over $200 million and counting), Block.one ($185 million), Bancor ($150 million), Status (over $100 million).
Given such a scenario, an advisor to the People’s Bank of China has urged investors to maintain high caution when considering ICO investments. In an interview with Yicai Global, Sheng Songcheng, said that bitcoin does not have the fundamental attributes needed to be a currency, adding:
“Virtual currencies are highly volatile, and fluctuations in their prices can easily reach 10 to 30 percent,” Sheng said. “If a country accepts one of them as its national currency, the entire national economy could collapse due to currency volatility. Project financing based on a volatile virtual money also entails risks.”
Speaking on ICOs, Sheng called upon the government to warn investors of related risks, while encouraging healthy innovation. He said:
“Only time and market dynamics will tell how popular blockchain technologies and ICOs will become in the future. Moderate regulation should be applied, but it should not stifle innovation.”
Sheng pointed out that current problems with ICO projects emanate from the absence of uniform information disclosure standards and procedures. Without naming any particular project, he noted that some overhyped projects were not subject to effective supervision and regulation after the financing stage. By exploiting these shortcomings, many funding platforms led rampant speculation in the market. Citing these reasons, he said that information disclosure requirements and moderate regulation for ICO projects must be introduced.
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