THE central bank’s Shanghai head office said yesterday that investors should increase risk awareness for initial coin offerings (ICOs) and virtual currency investment and not blindly speculate in the market.

China has taken a string of steps to clamp down on the crypto-currency market, including closing exchanges and banning ICOs in an aim to diffuse online financial risks.

The government was also preparing fresh regulations to further restrict initial coin offerings, especially via overseas platforms, domestic media reports said earlier.

The government would implement the package of new measures when “conditions are ripe,” the reports said.

The central bank has started monitoring overseas websites of virtual currency trading platforms to curb risks caused by a rush of investment following the ICO ban.

The central bank said China paid close attention to the blockchain and distributed ledger technologies that Bitcoin is built on, but that some applications of the technology had grown too quickly.

“If they spread too rapidly, it may have a big negative impact on consumers. It could also have some unpredictable effects on financial stability,” said former central bank Governor Zhou Xiaochuan.

Some criminals raised funds illegally in the name of financial technology innovation, using concealing measures such as initial coin offerings or virtual currencies, said Gong Yan, deputy director of the legal affairs department at the People’s Bank of China.

The central bank and related government departments have jointly issued several risk alerts on alleged illegal fundraising activities at virtual currency exchanges and have taken actions to restore market order, Gong said.

The number of illegal fundraising cases and the amount of money involved has dropped noticeably since 2017, as China stepped up its crackdown on such activities.

Statistics from the interagency task force leading the crackdown on illegal fundraising practices show that in the first three months of this year, 1,037 illegal fundraising cases occurred nationwide, and the number declined by 16.5 percent year on year. During the same period, the amount of money involved with these cases fell 42.3 percent year on year to 26.9 billion yuan (US$3.95 billion).(SD-Agencies)