Beijing Finance Governor Bans Security Token Offerings in City

[PRIBO247]

The municipality of Beijing has banned
another form of crypto-token sale,
according to Caijing .

“Don’t do it in Beijing.”

Huo Xuewen, the chief of Beijing’s
Municipal Bureau of Finance, declared
in a recent speech that security token
offerings will not be tolerated in the
city. This cannot be considered
surprising, because China began
banning private cryptocurrency ventures
last year.

Speaking at the ‘2018 Global Wealth
Management Forum’ on the subject of
wealth management services, he said
(translated):
“Recently, ICOs have been
abandoned, and a new concept called
STO has been advertised. With today’s
platform, I will make a risk warning to
those who are propagating in Beijing
and want to issue STO. Don’t do it in
Beijing. If you do it in Beijing, you will
be taken away from illegal financial
activities. When we have the authority to
approve you to do an STO, we will say.”

WHAT IS A SECURITY TOKEN OFFERING?
The STO is a new incarnation of the
initial coin offering. An ICO is the sale of
newly-created crypto-tokens to the
public.

There are a few issues with ICOs. The
first glaring issue, that became apparent
very quickly during the cryptocurrency
boom, is that without regulation,
companies will quite happily sell people
worthless or nonexistent goods and
services – either deliberately or through
sheer incompetence – in order to make
money.

The second issue is, even in cases where
sold tokens are real assets of a successful
business, do they constitute securities?
That is, are they shares of a business?
Because if they are, companies must
register with national regulators.
Cases in which a regulator has shut
down a business for selling illegal
securities are many; and despite the
aforementioned issues, the general
public have spent billions and billions of
dollars on crypto-tokens. The act of
selling them in this way has been
banned in several countries, and many
major companies have refused to host
their advertising.

The STO is a kind of ICO that is intended
to be more regulation-friendly. As the
name suggests, purchasing an STO token
gives one possession of a security, or a
share in a business, in the classical sense
of the word. The tokens represent
tangible assets. There are regulations in
place in many places that allow
companies to sell these without having
to go public- for example, if they are sold
only to accredited investors.

The Chinese government banned ICOs in
September 2017, and has generally
looked to crush all private
cryptocurrency enterprises. At the same
time, however, it has been promoting
the development and adoption of
blockchain technology enthusiastically.
Xuewen’s words reflect this policy.

Source : https://www.financemagnates.com/cryptocurrency/news