NEW YORK - China has banned the hottest trend sweeping the cryptocurrency world and now the entire market for digital currencies is under pressure.
On Monday morning in Beijing, a slew of Chinese regulatory agencies released a joint statement in which they affirmed that initial coin offerings (ICOs), a cryptocurrency-based fundraising method, are illegal in the country.
The market for ICOs has grown exponentially this year with some firms using the fundraising method to raise millions of dollars in minutes without offering an actual product. As such, many Wall Streeters are calling the market a bubble.
To raise cash through an ICO, a company issues a new digital currency that can either be spent within its ecosystem, a bit like Disneyland dollars, or used to power part of the business.
Since the beginning of the year, $1.8 billion has been raised via ICOs, according to an email from financial technology analytics provider Autonomous NEXT.