Topic: Why are people acting as if China couldn't cause a market wide collapse? (Read 1078 times)

The legality of competitively proof-of-work mined coins are not at all afflicted by recent events.

So prior rulings about the legality of Bitcoin are irrelevant to the issue about ICOs.

The difference compared to prior Chinese regulatory actions, is that this appears to have been a coordinated event amongst regulators in many nations.

And the ETH ICO madness was entirely out-of-control and risking naive investors’ funds in a plethora of scams. It became a new Xerox copy ICO every day scam. The nations had no choice but to act. And surely the SEC and other nations will follow. I think Asia acted first because their governments are less democratic and more authoritarian, so they can act quicker. The democratic nations will follow because their regulators have the same responsibility to their citizens. The wheels just move slower in the democratic nations. Asia is finely oil machine that is more efficient than the West now.

The issue is not exclusive to China. China, Canada, Russia, South Korea, and Singapore have warned about coming enforcement action. The SEC already recently warned in the context of The DAO. Obviously the recent events are coordinated between regulators in all these nations including probably the SEC.

Click here for a longer explanation of why proof-of-work mined tokens are not investment securities and thus not afflicted by recent events.

The above link also discusses Ethereum’s ETH, Ethereum ICOs, and others.

It is also very important to note that pre-existing ICO-issued tokens, are illegal to trade and can be delisted from exchanges. Your home country can make it illegal for you to trade them. The above link explains this is more detail.

Please stop spreading the incorrect information, implying that ICOs will come back or that pre-existing ICOs can still be traded. Most people do not want to go to jail or suffer fines. Even if they regulate ICOs, these will only be tradeable on registered exchanges and will not be spendable as cryptocurrencies (i.e. not allowed to be traded decentralized). Thus these new regulated ICOs will not be very useful. It will not be the same.

Many shady exchanges and their largest traders are likely to suffer fines and threats of criminal prosecutions. Today is only the beginning of a massive global crackdown. The gears may move somewhat slowly but over the coming year there will be massive changes to the crypto ecosystem. All the hard-headed will have their fingertips burned up to their armpits as necessary for authorities to stop the rapid proliferation of investment securities scams.


There will be no greater fools to sell the ICOs to, when they are not legal.

The ICO scam model depends on selling to newbies who come in and believe these 100s of Xerox copy ICOs each have a chance to become the next Bitcoin or Ethereum.

Nobody is going to speculate on illegal ICOs, because there will be no mass market for them, thus no way to hype them.

And it is not just USA and China that are banning ICOs. Same as was the case for FATCA (a USA only law), it became enforced in every country in the world, because the USA threatened to penalize every nation that did not comply.

We’ve already got Canada, Russia, China, Singapore, South Korea, and the USA warning about ICOs.

You’d have to be blind to argue this is not a critical mass.

I think that altcoins deserve to be down but bitcoin doesn't really have much to do with ICOs at all. Right now some projects don't even accept bitcoin as funding to their ICO projects, and it's an ethereum only thing.

China is still a really really big market, even with all the regulations that its central bank has over cryptocurrencies. People talk about Korea and Japan more now, but China is still a major driving force.

I think that bitcoin is going to stabilize at around $4000 while altcoins are going to continue its downward spiral. Overall the bitcoin dominance percentage should be going up steadily in the next month.

It goes deeper than that. If you think about it, Ethereum itself was an ICO. The genesis block created ICO tokens (ETH)... the ETH that came after was produced through proof-of-work mining. I imagine that the regulations aren't intended to target Ethereum, but it's funny to consider.


You're just drawing a distinction between cryptocurrencies and ICO tokens, right? I don't see an issue with proof-of-stake coins in this context.

IMO, the issue is that speculators do not yet understand that this event applies only to ICO-issued tokens and not to genuine proof-of-work cryptocurrencies.^*

I have several posts trying to explain this and so far there is a lot of confusion amongst readers.

However, you're incorrect if you think this is limited to only China. Several major countries have announced a crackdown on the same day. The SEC will follow soon I am sure. This was a coordinated action so that means it is serious. ICO-issued tokens are doomed.

^* If ICOs cease, I suppose this might dampen demand for BTC. Yet if there is a selloff of all ICO-issued tokens and purchasing of only proof-of-work tokens with those funds, we might have increasing demand for proof-of-work tokens?

Perfectly said, this all panic is from the weak hand traders who are always reacting to the fud and silly unknowing the details about any news and just panic and sell everything and when the market reacts positively and go up then come and cry here of their stupidity action. But this is good for the real investors for investing back in low.

China didn't cause a market-wide dip.

Stupidity, over-reaction and panic did.

Proof-of-work issued coins remain legal and should recover eventually.

ICO-issued coins will become illegal to trade every where.

More details.


Existing ICO-issued tokens will become illegal, because investment securities are illegal to exchange if not on a registered exchange. And illegally issued investment securities are never legal to trade.

Thus ICO-issued tokens can not be spent decentralized. They are useless because can’t function as a cryptocurrency. At least not legally.

Blame Ethereum and its creator. It needed a reason to exist, and ICOs were scammed to the public as that reason. 

ICOs had to go either way, and it seems this is how they will go away. Keeping ICOs long term is generally bad for crypto anyways as there's lots of scam ICOs and ones that just never reach their planned goals, it's good that this is happening but it comes at the cost of a worldwide devaluation for crypto. Will we get out of this? Most likely yes.

The price really crashed down to earth, and I believe it is the China's banning ICO effect, this regulation will strike fears to the investors maybe today banning new ICO the next day can be banning existing ICO

When the investors had already put a lot of money in the ICO or alt coins, they will take precautions steps and that will cause the market to become unbalance and it is going to affected all crypto

If that is the problem why the price of bitcoin was crashed well if the crypto and ICO was the reason affecting also the bitcoin price..
Why they are also includes to decrease the price of bitcoin..
Bitcoin is not altcoin and i think they are different.. So there is another panic selling here because of the new like this ,

Yes, with China banning ICOs and cryptocurrency to currency exchange is what crashed the market today for sure.

The government there really does have power over the market sentiment. It's not clear yet if Chinese investors are outright baned from putting money on ICOs but the recent ban surely drives big money out of the economy and reduces interest.

Plenty. People have to buy BTC so they can buy into ETH depending on what exchange they favour. The alt explosion was no doubt a factor in Bitcoin's rise because of that.

Exactly, What have Monero and Bitcoin do with different Etehreum ICOs?  Are people so stupid? Who are this people?  Paris Hilton?

I don't see it as that. China has banned ICOs from being created but nowhere do i see China banning investors from investing in other ICOs. This seems like good news to me. Anything I'm missing?

The only upside I can see is that maybe if there are no native Chinese ICOs, Chinese investors interested in crypto have no alternative than to put their capital in international projects (assuming they don't shut down the Chinese exchanges as well as local ICOs). Overall though there's no way to spin this as anything other than a huge blow to the industry.

Who's acting like that? From the morning, I saw many people counting China as the responsible for this wide market crash. So people are aware of it already. China's action made this crash and it's still keep going in many altcoins now.

There've been something like over 60 China only ICOs that we haven't really heard about and those are the ones attracting the PBOC's ire.

Until the last few months there was nowhere a Chinese person could buy ETH, let alone all the other ICO pretender shite.

And did you not notice the almost complete closure of the Chinese market for several months? The price went through the roof while they were dozing. China's significant of course but it's not and never has been the be all and end all despite the endless years the zero fee exchanges made very other market their bitch.

We expected ICO regulations to come in but not with this kind of impact hope to see a quick recovery.

its a known fact that bitcoin is a survivor and as i see from coin market altcoins have been hit the hardest dropping in the range of 5%-50% but tables will turn when all this settles down in a few weeks time.