China lets some air out of the ICO bubble

Earlier today the government of China banned ICOs – initial coin offerings.
We talked about ICOs last week – it’s the latest application of cryptofinance technology for companies to raise capital without having to rely on traditional methods like banks, brokers, and venture capital firms.
Through an ICO, any company can raise money by selling ‘tokens’ to investors, who typically pay with cryptocurrency like Ether or Bitcoin.
And those tokens normally represent shares in the company.
The entire transaction takes place over the blockchain, i.e. the cryptocurrencies’ decentralized ledger systems.
There are no government agencies involved. No regulators. No banks or brokers extorting huge fees. It’s just the company and its investors… a voluntary seller of tokens and voluntary buyer of tokens.

This post was published at Sovereign Man on September 4, 2017.