According to a report in Reuters, the trade group issued the warning because of what it called financial and social risks associated with cryptocurrencies like Bitcoin or Ethereum.
“We urge all our members to exercise self-regulation and strictly abide by laws by not participating in any centralized trading or [providing] services for this type of trading,” the Internet Finance Association of China said in a notice on its website, Reuters reported.
The Internet Finance Association is the latest group in China to speak out against digital currencies. Citing scams and financial risks, the government put an immediate ban in place earlier this month forbidding the funding of initial coin offerings (ICOs). The Central Bank of China said at the time that ICOs have “disrupted the economic and financial order.”
The Internet Finance Association’s warning comes as controversial fundraising activities have drawn attention — and no small share of scams. Further, seven government administrations jointly said the ICO exists as an unauthorized fundraising effort which may, in fact, be tied up in such scams. The roster of government entities issuing the warning statement included the People’s Bank of China and the China Banking Regulatory Commission, among others.
The statement also warned that financial institutions should not be involved with ICO trading activity. Individual investors and firms that have completed ICOs and raised funds should be ready to give those funds up, CNBC noted in the statement.
Advertisement: Scroll to Continue
Earlier this week, Chinese financial news site Caixin reported authorities in China were gearing up to shut down the Bitcoin exchanges in the country, which drove the cryptocurrency’s price down and sparked confusion by the operator of Bitcoin exchanges in China. The operator had yet to be informed of the new rule.
