The Chinese government has banned Initial Coin Offerings (ICO), a new fundraising phenomenon that has taken the Internet by storm. In a recent ruling, the People’s Bank of China ruled that these unregulated sales violated Chinese law and must stop immediately.
There have been dozens of ICOs this year alone, with many raising tens of millions of dollars.
The ruling has likely put downward pressure on the value of the leading cryptocurrencies, bitcoins, and Ethereum’s ether. As a result, Bitcoin hit a low of $4,037 falling by more than $300 – as it continued to take in the Chinese clampdown on cryptocurrencies. The latest drop indicates a 20 percent fall following the coin’s $5,000 high over the weekend.
Users who participate in ICOs are typically required to acquire Bitcoin or Ethereum to exchange for new cryptocurrencies, and so the ICO boom has helped to push up the value of both Bitcoins and ether.
The cryptocurrency has since recovered gaining about 4.5 percent over that period.
