How Industry Responded to China’s ICO Ban
Regulations can make crypto economy more transparent, safe for all the investors and thereby more attractive.
The Chinese regulators have banned the execution of ICOs within its borders, while this has altered the activities of a number of blockchain companies, others have continued with their original plans, insisting that such a development is only but a temporary setback that will lead to a more sanitized industry.
Just a slight “hiccup”
Anthony Diioro, CEO and Founder at Jaxx describes the trending ban out of China as nothing more then a slight "hiccup" for the rapidly growing global decentralized technology ecosystem.
Diiorio notes that any attempts to quash the flow of value between individuals, to attempt to restrict the freedom of individuals in this ever increasingly connected world will be unsuccessful in the long term.
“Information wants to run free, be free, and "value" is information, 1's and 0's. Countries and government whose goals are to restrict the flow of value, to keep it within their borders, will be missing out on crucial opportunities. They will miss out on the opportunities to develop new emerging sectors and to discover new ways to create true value in the world.”
He concludes by noting that over time countries and governments that direct themselves based on "fears" will do those within their borders a great disservice.
Looking into the future
One of the longest running digital currency service providers in Europe, Cryptopay is continuing with its plan slated for later this year.
Cryptopay has been in operation since 2013, providing a seamless exchange between crypto and conventional assets to the crypto community.
George Basiladze, CEO of Cryptopay, tells Cointelegraph that his company is looking beyond the present circumstances surrounding the crypto ecosystem.
He notes that the current ban from China is a temporary setback that should not distract the industry from their long term focus.
“The future is very bright when it comes to payments and financial services overall. For decades we have been working with legacy antiquated systems and have come to a point now where it's not efficient to continue. Blockchain has come along to unravel the complexity built up over the years and provide a truly secure, immutable, and scalable infrastructure, which has never been achieved.”
A negative effect on the markets
Valentin Preobrazhenskiy, CEO at LAToken, explains that his company has responded to the development by putting all of its activities related to China on hold:
“We were about to participate in Blockchain conferences and meetups there, but cancelled our roadshow in mainland China. We also don’t accept contributions from Chinese citizens and residents at the moment. However, the Chinese ban doesn’t affect our activities in other countries, and we still proceed with our token sale as scheduled.”
Preobrazhenskiy acknowledges the negative sentiment created by the development in China as is evident in the market behaviour. Bitcoin price quickly bounced, while Ethereum, the most popular currency for ICOs, is still in a holding pattern as markets worry that other operations with cryptocurrencies may be banned by Chinese regulators as well.
Another anxiety trigger comes with the fears, that other regulators might follow Chinese ruling and ban token sales instead of regulating.
Preobrazhenskiy notes that along with cancelling all the activities related to China, his company has introduced a representation form, that stops Chinese investors from investing in the aftermath of the ban.
Expressing his opinion towards the development, Tone Vays, Blockchain Consultant and Researcher, tells Cointelegraph that it is looking more likely that while China has banned ICOs, they are going to demand licensing from those running Bitcoin exchange.
Vays explains that the development is not expected to have a great affect on Bitcoin in the long run but that the ICO ban would put heavy pressure on Ethereum:
“I think more countries would follow in China's footprints when it comes to banning ICO because they are an unregulated form of funding and most countries have laws to prevent this. “Unfortunately for Ethereum it has no other use case than to be a platform for those ICO's.”
Two sides of a coin
The level of confidence exhibited by some of these organizations may be connected with how Bitcoin and the general crypto market have reacted previously in the wake of assumed setbacks.
Simon Dixon, CEO of BnkToTheFuture.com says:
“One country’s ban will be another country’s opportunity, we saw this first hand when Japan took the Bitcoin market from China after PBOC last intervention. We saw that PBOC came back with a supportive approach after watching Bitcoin impact in Japan and I expect the same with ICO's.”
However, Dixon notes that this ban is rather a much needed cooling down of a bubble that was getting overheated and needed to return to real fundamental value. He also believes that the Chinese government will eventually review the policy once they have time to digest how to handle ICO's in the future.
This is similar to the sentiments upheld by Blockchain Consultant Kaushik Ghosh who believes that no government can actually put a bar on the development of blockchain based applications. Ghosh expects these bans to be eventually lifted and replaced with regulatory measures to control the scams which are also quite popular.
The fact that governments and regulatory bodies are becoming concerned about happenings around the crypto ecosystem can be analysed from two different perspectives.
One perspective is that the government is acting as an advisory body to its citizens, attempting to protect them from unhealthy projects, and the second perspective being that the government is becoming more interested in the happenings within the crypto ecosystem. The latter is a good sign for crypto advocates when considering the subject of adoption.
Mark Morris, Founder at token.farm, believes that the Chinese government crackdown on cryptocurrency is a positive sign for the monetary trend to adopt cryptocurrency as a replacement for fiat. He claims that the movement is alive, strong, and a threat to the old guard.
Morris notes that this can be compared to specific countries where citizens are incentivized to move wealth to other sovereign entities to protect it, saying that nothing else is new this time except for the vehicle which is now cryptocurrency via blockchain protocols.