The major Beijing-based social network company, Renren Inc., has recently decided to scrap their plans for launching their own initial coin offering (ICO). According to sources close to the matter, the decision was brought about shortly after Renren representatives met with Chinese regulators, who strongly discouraged the endeavor.
In a decisive move, Chinese regulators declared ICOs to be illegal within the country’s borders. Renren representatives still decided to meet with the relevant authorities, however, in an attempt to find a way to evade certain policies. China’s policies regarding ICOs still remain somewhat ambiguous, as it is still unclear whether their ICO ban applies to companies listed outside of the Chinese mainland, such as Renren, which is listed for trading in New York. However, two sources noted that Chinese regulators were specifically monitoring Chinese companies who were listed in cities outside of China.
China has been notably aggressive in its policies towards ICOs. Despite the crackdown and subsequent ban, ICOs have remained as a popular method for generating startup capital in the international community. Akin to crowdfunding, ICOs appeal to the general public for investment. In return for their investment, they receive a virtual token of proportionate value, which they can either trade, spend on the relevant network, or keep. In the last year, many ICOs generated millions of dollars worth of funds, with some raising up to $4 billion. This, in turn, caused regulators worldwide to adopt a cautious approach.
According to the company’s whitepaper, Renren intended to launch an ICO, dubbed RRcoin. Renren has chosen not to comment on whether or not their decision was influenced by Chinese regulators. In addition, the Bank of China has not yet commented on the matter.
Renren has had a fantastic start to the new year as their company shares experienced a 22% increase since the start of the year. At noon today, however, shares underwent a 4.5% decline to trade at $12.14.
Governments and regulators alike have been grappling with issues regarding ICO policies and monitoring ever since the capital funds raising method came into prominence in 2017, perhaps there is no better case study of this than China itself. Several Chinese traditional financial institutions have denounced ICOs as being a threat to financial stability, while the rest of the world has been scrambling to find a middle-ground that would ensure a healthy economic ecosystem.
ICOs have also gotten the attention of central banks across the world, as these institutions also mostly consider ICO’s a threat to the current economic sphere.
In a decisive move, Chinese regulators declared ICOs to be illegal within the country’s borders. Renren representatives still decided to meet with the relevant authorities, however, in an attempt to find a way to evade certain policies. China’s policies regarding ICOs still remain somewhat ambiguous, as it is still unclear whether their ICO ban applies to companies listed outside of the Chinese mainland, such as Renren, which is listed for trading in New York. However, two sources noted that Chinese regulators were specifically monitoring Chinese companies who were listed in cities outside of China.
China has been notably aggressive in its policies towards ICOs. Despite the crackdown and subsequent ban, ICOs have remained as a popular method for generating startup capital in the international community. Akin to crowdfunding, ICOs appeal to the general public for investment. In return for their investment, they receive a virtual token of proportionate value, which they can either trade, spend on the relevant network, or keep. In the last year, many ICOs generated millions of dollars worth of funds, with some raising up to $4 billion. This, in turn, caused regulators worldwide to adopt a cautious approach.
According to the company’s whitepaper, Renren intended to launch an ICO, dubbed RRcoin. Renren has chosen not to comment on whether or not their decision was influenced by Chinese regulators. In addition, the Bank of China has not yet commented on the matter.
Renren has had a fantastic start to the new year as their company shares experienced a 22% increase since the start of the year. At noon today, however, shares underwent a 4.5% decline to trade at $12.14.
Governments and regulators alike have been grappling with issues regarding ICO policies and monitoring ever since the capital funds raising method came into prominence in 2017, perhaps there is no better case study of this than China itself. Several Chinese traditional financial institutions have denounced ICOs as being a threat to financial stability, while the rest of the world has been scrambling to find a middle-ground that would ensure a healthy economic ecosystem.
ICOs have also gotten the attention of central banks across the world, as these institutions also mostly consider ICO’s a threat to the current economic sphere.