In China, another institution issued a risk warning about the issue of security token offerings (STO). The Beijing Internet Finance Industry Association issued the “Risk Prompt on Preventing the Implementation of Criminal Activities in the Name of STO”, which means that some institutions or individuals have been found recently. In the Name of STO, engaged in publicity training, project promotion, financing transactions, and other related activities. The Association emphasized that STO involves illegal financial activities.
The Association reminds relevant individuals and institutions that all financial services must be included in the supervision. STO involves illegal financial activities and should strictly abide by national laws and regulations. It also calls for the immediate suspension of various types of publicity and training, project promotion and financing transactions related to STO. Institutions and individuals who are suspected of violating the law will be severely punished, such as being driven away, closing of website platform and mobile applications, and revoked business licenses. The Association also stated that investors should maintain rationality, enhance risk prevention awareness, and actively resist illegal financial activities.
On September 4 last year, the People’s Bank of China and seven ministries jointly issued a notice prohibiting initial coin offering (ICO) calling them “illegal fundraising” activities. On Saturday (1st), Huo Xuewen, director of the Beijing Municipal Bureau of Local Financial Supervision, pointed out that Beijing would regard STO as an illegal financial activity and said: “Don’t do it in Beijing – it is illegal. You can only engage in such activities with the approval from the government.”