Today, seven of China’s monetary authorities — including the People’s Bank of China, the Central Network Office, the Ministry of Industry and Information Technology, the State Administration for Industry and Commerce, and the China Banking Regulatory Commission, issued a joint statement effectively banning all crypto currencies, tokens, and ICOs in mainland China.
This decision has triggered a panic reaction in the markets.
First of all, we need to clarify that China and Hong Kong are two distinct jurisdictions.
Under the principle of ‘one country, two systems’, Hong Kong has its own legal system, distinct from the Law of the People’s Republic of China, and based on the combination of English common law (developed in local cases) and local legislation codified in the Laws of Hong Kong. Hong Kong has a common law system, whereas the PRC has a civil law system with socialist roots. Only a small number of PRC laws apply in Hong Kong by virtue of stipulations in Article 18 and Annex III of the Basic Law. The separation of the Hong Kong legal system from the PRC is guaranteed constitutionally until at least 2047.
In other words, entities registered in Hong Kong have not been affected by the above mentioned joint statement. The Commodity Ad Network is currently operated via a Hong Kong corporation, therefore our project will go on according to our roadmap with no changes whatsoever.
However, I find it important to note two things.
First, China has strict capital flow regulations. Token sales and ICOs were a very easy way to circumvent these regulations. So it comes as no surprise that the authorities have finally had enough and clamped down on this activity. To give you an idea of the magnitude of the capital outflows, today about half of all the volume in cryptos came from China. That translates to billions of dollars of capital movements in a day.
Second, I am absolutely sure that the Chinese authorities are perfectly aware of the promise and possibilities crypto currencies hold. Therefore, it would be unwise for them to permanently destroy this market. In my opinion, they will promptly come out with clear regulations and laws regarding crypto currencies, token sales, and ICOs. Otherwise, all they have managed to do is create a massive black market within China.
Regulations are definitely coming to crypto world. And given the number of ponzi schemes, pyramid schemes, and various shady ICOs I have come across lately, it’s high time for that.
The Commodity Ad Network is creating a useful online service which will be fully functional by January 2018. And since we are not a scam, any sensible regulation will be most welcome by us.