China’s National Internet Finance Association has issued a statement stating that all projects raising cash through virtual currencies or other cryptocurrencies are now banned.

The report went to say that 90% of the ICO projects are suspected of illegally raising money and subjective intentional fraud; and only 1% of the money is raised is used for blockchain projects. The Chinese government went on to conclude that the purpose of these ICOs is to avoid this “securities law” and “disposal of illegal fund-raising regulations” and other constraints.

China exchange platform ICOINFO has shutdown all ICO business due to the suspension:

As a platform for intervening services for ICO projects, ICOINFO has been complying with the relevant laws and regulations, the first time in the market signs of risk, the first time to suspend all ICO business, and actively wait and cooperate with the relevant regulatory policy landing.

News sends markets into capitulation

Once the news broke that China would be doing a crackdown on ICOs, the markets began rapidly losing points. At current press time, ETH was trading at $307 with a 12% drop while Bitcoin currently priced at $4334 at a 5.3% drop.

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