China’s Central Bank, the People’s Bank of China, reported to the South China Morning Post its decision concerning security token offerings, noting that they are illegal in the country.

The bank’s deputy governor Pan Gongsheng appeared at a summit in Beijing and there, he discussed the “illegal” financing activities that have been effectuate with STOs and ICOs and that they are “still rampant in the mainland despite a nationwide clean-up of the cryptocurrency market last year.” He also added that without the government’s intervention, it would have impacted the country’s financial stability.

Gongsheng also noted that “the STO business that has surfaced recently is still essentially an illegal financial activity in China” and that cryptocurrencies are seen as damaging due to their connection with crime.

He added,

“Virtual money has become an accomplice to all kinds of illegal and criminal activities.” Further, he continued that “most of the financing operations conducted through ICOs in China were suspected of being illegal fundraising, pyramid sales schemes and other financial fraud.”

Gongsheng is not the only one who has taken such a stance toward STOs. Huo Xuewen, the Chief of the Bureau of Financial Work stated,

“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.”

Even though China has taken a negative stance toward cryptocurrency, it’s approach toward blockchain has been quite positive. For instance, a Chinese Internet Court adopted blockchain to protect writers’ intellectual property.

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