In the backdrop of rising financial crisis associated with initial coin offerings (ICOs) six blockchain companies from China have come together to release a joint protocol which is aimed at mitigating the involved hazards. China Money Network reported that Guiyang Blockchain ICO Consensus is the joint protocol which was proposed by:
-)Guiyang Blockchain Innovation Research Institute,
-)Guizhou Blockchain Industry Technology Innovation Alliance,
-)Blockchain Finance Association,
-)Zhongguancun Blockchain Industry Alliance, and
-)Two more unnamed entities.
This will be the foremost voluntary network in China looking after the regulation and development of the much talked about Fintech spectrum. The joint consensus is also targeting to pump up investor protection which has been in radar off late given the recent ICO hacks. Digital currency exchange Coinbase reported an Ethereum theft worth $7 million USD a few days back.
At present there are 43 Chinese platforms conducting ICOs mostly located in Beijing, Shanghai and Guangdong thus accounting for a whopping 60% of total ICO platforms. The accumulative fundraising figure crossed $420 million in China with approximately 105000 participants.
According to the reports of China Internet Security Technology Commission, the nation has been banking heavily on Bitcoin and Ethereum comprising a 90% fundraising medium. It is not yet clear whether this consensus will have deep seated effect on ICO functioning but the move surely brings the urgency among leaders to do so in limelight. Uncertain token liquidity, security and difficulty in token evaluation are the foremost hazards of ICO investment.
China does not have any ICO regulatory body at present. But given their actions and quick turn arounds, the Chinese men surely know how to manage their virtual currencies. Earlier this year, the People’s Bank of China brought in fintech guidelines regarding Bitcoin which includes real name registration before account signing up and setting up of a digital currency research centre.
With the whole world sitting up and taking notice of the ICO craze, very recently the Securities and Exchange Commission of United States made an announcement of regulating the DAO security tokens. This was also the first time for any U.S. regulatory body to publicly recognise their position of the issue.
ICO refers to an unregulated medium of crowdfunding wherein companies issue virtual currencies to interested investors for raising their desired capital. Since the first issuance of Mastercoin in 2013, the whole market has shown extreme potential. In comparison to 2016 dealings, ICO’s dealings rained in ten times larger in the current year’s first half.