Chinese Blockchain Association develop protocol to regulate ICOs

Six Chinese Blockchain industry associations have jointly issued a protocol to better manage and control financial risks for initial coin offering (ICO) in China, in the country’s first voluntary framework to regulate the development of one of the hottest areas in financial technology. The article was in Chinamoneynetwork.com. The article stated, that Guizhou Blockchain Industry Technology Innovation Alliance, Zhongguancun Blockchain Industry Alliance, Blockchain Finance Association, Guiyang Blockchain Innovation Research Institute and two other unnamed entities together released “Guiyang Blockchain ICO Consensus” in Guiyang with an eye to offer investor protection and maintain financial system stability.

Currently there are 43 platforms providing ICO services in China. The accumulative ICO fundraising value reached RMB2.6 billion (US$420 million), with around 105,000 people participated. Guangdong, Shanghai and Beijing are the three cities with most ICO platforms. The three cities together have over 60% of the total platforms. Bitcoin and Ethereum are top two currencies, together accounting for 90% of ICO fundraising, according to data from China Internet Security Technology Commission.

The explosive growth and financial risks associated with it have led the Chinese blockchain associations to gather and release the protocol. It’s unclear how much enforcement power the document has on ICOs in China, but the move highlights the urgency industry leaders feel regarding risks arising from an increasing number of ICOs across the country.

The protocol will better manage and control financial risks for initial coin offering (ICO) in China, in the country's first voluntary framework to regulate the development of one of the hottest areas in financial technology. During the first half this year, around US$1 billion was raised via ICOs in the U.S., ten times larger than the total raised in 2016. In July, two American small blockchain companies Tezos and block.one raised a combined US$400 million, setting a new record for the industry. As of May 2017, there were around 20 offerings per month globally.