China to rein in overseas virtual currency trading

China's central bank said it will tighten regulations on domestic investors' participation in overseas transactions of "initial coin offerings" (ICOs) and virtual currency as the risks are still high in the sector.

Overseas ICO transaction platforms pose risks including illegal offerings, false information, fraud and pyramid schemes, according to the People's Bank of China (PBOC).

Regulators warned that domestic investors should be alert to risks and refrain from participating in speculation in virtual currency transactions.

China will take a string of measures to guard against financial risks and maintain stability, according to the PBOC.

"ICOs, in essence, are a kind of unauthorized and illegal public fundraising and are suspected of having ties to criminal activities such as financial fraud and pyramid schemes," according to an earlier statement from the central bank.

Last September, authorities ordered a ban on ICOs and shut down all virtual currency exchanges in the country, as the rapidly expanding market triggered concerns over financial risks.

(ASIA PACIFIC DAILY)