Beijing Finance Governor Bans Security Token Offerings in City
- "Don't do it in Beijing," said Huo Xuewen.
The municipality of Beijing has banned another form of crypto-token sale, according to Caijing.
"Don't do it in Beijing."
Huo Xuewen, the chief of Beijing’s Municipal Bureau of Finance, declared in a recent speech that security token offerings would not be tolerated in the city. This cannot be considered surprising, because China began banning private cryptocurrency ventures last year.
Speaking at the '2018 Global Wealth Management Forum' on the subject of wealth management services, he said (translated): "Recently, ICOs have been abandoned, and a new concept called STO has been advertised. With today's platform, I will make a risk warning to those who are propagating in Beijing and want to issue STO. Don't do it in Beijing. If you do it in Beijing, you will be taken away from illegal financial activities. When we have the authority to approve you to do an STO, we will say."
What is a security token offering?
The STO is a new incarnation of the initial coin offering. An ICO is the sale of newly-created crypto-tokens to the public.
There are a few issues with ICOs. The first glaring issue, that became apparent very quickly during the cryptocurrency boom, is that without Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( , companies will quite happily sell people worthless or non-existent goods and services, either deliberately or through sheer incompetence.
The second issue is whether tokens constitute securities. That is, are they shares of a business? Because if they are, companies must register with national regulators.
Cases in which a regulator has shut down a business for selling illegal securities are many; and despite the aforementioned issues, the general public has spent billions and billions of dollars on crypto-tokens. The act of selling them in this way has been banned in several countries, and many major companies have refused to host their advertising.
The STO is a kind of ICO that is intended to be more regulation-friendly. As the name suggests, purchasing an STO token gives one possession of a security, or a share in a business, in the classical sense of the word. The tokens represent tangible assets. There are regulations in place in many places that allow companies to sell these without having to go public- for example, if they are sold only to accredited investors.
The Chinese government banned ICOs in September 2017 and has generally looked to crush all private cryptocurrency enterprises. At the same time, however, it has been promoting the development and adoption of Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe technology enthusiastically. Xuewen's words reflect this policy.
The municipality of Beijing has banned another form of crypto-token sale, according to Caijing.
"Don't do it in Beijing."
Huo Xuewen, the chief of Beijing’s Municipal Bureau of Finance, declared in a recent speech that security token offerings would not be tolerated in the city. This cannot be considered surprising, because China began banning private cryptocurrency ventures last year.
Speaking at the '2018 Global Wealth Management Forum' on the subject of wealth management services, he said (translated): "Recently, ICOs have been abandoned, and a new concept called STO has been advertised. With today's platform, I will make a risk warning to those who are propagating in Beijing and want to issue STO. Don't do it in Beijing. If you do it in Beijing, you will be taken away from illegal financial activities. When we have the authority to approve you to do an STO, we will say."
What is a security token offering?
The STO is a new incarnation of the initial coin offering. An ICO is the sale of newly-created crypto-tokens to the public.
There are a few issues with ICOs. The first glaring issue, that became apparent very quickly during the cryptocurrency boom, is that without Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( , companies will quite happily sell people worthless or non-existent goods and services, either deliberately or through sheer incompetence.
The second issue is whether tokens constitute securities. That is, are they shares of a business? Because if they are, companies must register with national regulators.
Cases in which a regulator has shut down a business for selling illegal securities are many; and despite the aforementioned issues, the general public has spent billions and billions of dollars on crypto-tokens. The act of selling them in this way has been banned in several countries, and many major companies have refused to host their advertising.
The STO is a kind of ICO that is intended to be more regulation-friendly. As the name suggests, purchasing an STO token gives one possession of a security, or a share in a business, in the classical sense of the word. The tokens represent tangible assets. There are regulations in place in many places that allow companies to sell these without having to go public- for example, if they are sold only to accredited investors.
The Chinese government banned ICOs in September 2017 and has generally looked to crush all private cryptocurrency enterprises. At the same time, however, it has been promoting the development and adoption of Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe technology enthusiastically. Xuewen's words reflect this policy.