The United States isn’t the only country to issue guidelines on initial coin offerings. According to a new report, six Chinese blockchain industry associations have also jointly issued a protocol to better manage and control financial risks for initial coin offering (ICO) in China.

The rise in ICO’s in China, made possible through crowdfunding, has been exceptional, and concentrated, raising questions as to the impact of the transactions on financial stability:

“The accumulative ICO fundraising value reached RMB2.6 billion (US$420 million), with around 105,000 people participated. Guangdong, Shanghai and Beijing are the three cities with most ICO platforms. The three cities together have over 60% of the total platforms. Bitcoin and Ethereum are top two currencies, together accounting for 90% of ICO fundraising, according to data from China Internet Security Technology Commission.” More here.

That said, it’s highly unlikely the steps taken by the blockchain associations will mirror anything like that of the SEC.  Neither will they be as consequential. For one, the guidelines are voluntary (not to mention non-governmental).  Second, even if they were somehow declared to be mandatory for the associations’ members, it is unclear how they could be reliably or uniformly enforced. Unlike the United States, where ultimately industry organizations like FINRA and the NFA routinely regulate their members, few if any self regulatory organizations (including the Securities Association of China and NAFMII) have anything that could exert similar enforcement power over their ranks.   As such, the primary regulatory concern for market participants in China, at least for the time being, will be the extraterritorial application of the SEC’s enforcement net.

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