SHANGHAI / BEIJING, Sept. 4 (Reuters) - Bitcoin and ether, two of the world's largest cryptomonists, retreated on Monday after the Chinese authorities announced a ban on individuals and organizations raising funds initial call offerings (ICOs) that Beijing said were illegal.
Bitcoin prices, which are notoriously volatile, fell by more than 8% after this announcement and dropped by 12.5%
compared to a peak of 4 979.90 dollars reached in session this weekend. It was trading at less than $ 1,000 at the beginning of this year.
Cryptomonetary fundraising, which allows start-ups using blockchain technology to raise millions of dollars online very quickly by issuing digital tokens in a little or unregulated environment, increasing success globally and in China in particular.
Natural persons and organizations that have raised funds via ICOs have to take steps to repay the funds, the People's Bank of China (PCB), Chinese bank regulators and other government agencies said in a joint statement .
According to Zennon Kapron, director of Kapronasia, a consulting firm specializing in financial technologies, the ICOs' decision to stop them is aimed at enabling them to better understand the phenomenon and the regulations could be relaxed in the future.
"Regulators around the world have a hard time understanding what ICOs are, what the risks are, how to control and regulate them," he said.
"In many respects China is no different from the US or Singapore when she says, OK we have to backtrack until we understand how we can manage them (..) I think this does not will be a temporary measure.
The ICOs have multiplied in China this year and the China news agency reported in July that 65 operations had been carried out since the beginning of 2017 for a cumulative amount of 2.62 billion yuan (330 million euros) from 105,000 investors.
Kapron said the decision by the Chinese authorities did not seem to prohibit Chinese investors from participating in ICOs outside China.
On the BTCC China platform, one of the main cryptomony exchange platforms in China, ether has dropped by about 8%.
(John Ruwitch in Shanghai, Elias Glenn and the Beijing office, Marc Joanny for French service, edited by Véronique Tison)