• The deputy governor of China’s Central Bank has confirmed that STOs are now banned
• The ban, according to him, is to prevent financial crimes
• The Chinese Cryptocurrency crackdown first started place in 2017

The blockchain industry has faced many setbacks in China. ICOs are banned there and it seems China’s hostility is only getting worse. It was announced Mondy that Security Token Offerings (STO) are now illegal there as well.

Chinese regulators vigilant against crypto

Just recently, Pan Gongsheng, deputy governor of the People’s Bank of China, made a comment about ‘illegal’ ICOs and STOs taking place despite the governments best efforts.

“The STO business that has surfaced recently is still essentially an illegal financial activity in China,” he told the forum, according to state-owned China Central Television. “Virtual money has become an accomplice to all kinds of illegal and criminal activities.”

This is the first time such a high-ranking public official is commenting and confirming the ban of blockchain offerings.

The ban is, according to him, because many of the ICOs and STOs are being used to fund illegal operations and financial fraud.

The ban had a global effect on the market as previously 80 percent of ICO issuances took place in China. The crackdown began in September and platforms were told to cease issuing digital currencies and ICOs.

The deputy governor said that had the ban not been put in place, the country’s economy would have been negatively affected.

This is in stark contrast to places like Malta where the industry has been welcomed with open arms.

No signs of improvement

It seems that others share the deputy governors opinion as last week, Huo Xuewen, chief of financial watchdog Beijing Bureau of Financial Work, said in a forum that “I want to warn those who are promoting STO fundraising in Beijing. Don’t do it in Beijing. You will be kicked out if you do it.”

Some are holding out hope for the ban to end eventually. Some have taken to using foreign IP addresses to get around the ban.

But with the deputy governors statements, it seems a lifting of the ban isn’t in the near future.

“The regulators will continue to strengthen regulation in the financial technology market to ensure financial stability,” said Cao Hua, a partner with private equity group United Asset Management.

“New business models in the financial technology sector are not welcome in China now.”