Security Token Offerings 'Illegal,' Says Beijing Financial Watchdog

Huo Xuewen, chief of Beijing's Municipal Bureau of Finance, has warned projects against holding security token offerings.

That STO fund-raising activities are "Illegal," at least in Beijing.

"I will issue a risk warning to those who promote and issue STO tokens in Beijing. My advice is to only engage in such offerings when the government has legalized them," he said.

An STO is similar to an initial coin offering, in which crypto tokens are sold by a company to the public in order to raise funds.

STOs also allow the token holders to share in the profits of a company based on an underlying asset.

Chinese authorities have been taking measures against token fundraising since September 2017, when the People's Bank of China banned.

ICOs outright, and forced crypto exchanges to cease operations.

On free distributions of crypto tokens called airdrops.

He said at the time: "Any new financial product or phenomenon that is not authorized under the existing legal framework, we will crush them as soon as they dare to surface."

In August, the finance department of China's Guangzhou Development District issued a notice to local businesses, prohibiting them from hosting any crypto-related promotions or events.