Soon after the $5,000 high set by bitcoin prices, the People’s Bank of China (PBoC) declared ICOs to be illegal. ICOs had become an innovative solution for developers seeking to fund, but the Chinese authorities claimed they disrupted economic and financial order. With close to $2 billion being raised this year alone, ICO funding had exceeded that of conventional venture capital funding according to a report by Goldman Sachs.
Also contributory to the ICO ban by the PBoC was a statement released by the SEC just a while earlier warning investors about the risks of ICOs. The most commonly cited example is that of the DAO last year when hackers manage to steal $60 million worth of ether tokens. Besides, the financial regulators also acknowledge the potential for misuse of ICOs for money laundering and other financial crimes.