"The longest day."
That's how James Gong, founder of ICOage, described Monday, the day on which seven China-based regulators took sweeping action against domestic initial coin offerings (ICOs), the nascent funding mechanism his startup was founded to enable.
In a broad series of releases unrivaled so far globally, China's regulators took aim at all aspects of the market, calling on exchanges cease the trading of ICO tokens and demanding that platforms issue refunds to select customers.
At the request of regulators, ICOage moved to suspend its operations, and it is now refunding only customers who have made purchases but who have yet to receive the tokens. Gong said refunds were now taking place in bitcoin and ether, the cryptocurrency for ethereum, the platform on which most ICOs have been based.
At press time, it seems other domestic websites are following suit.
ICOINFO, another China-based ICO gateway, announced on its website that it has refunded customers who participated in four token sales. Other refunds, it said, are set to begin later this week.
According to local traders, such sites had previously been hotbeds for regional ICO activity, with projects routinely raising between 3,000 to 5,000 BTC via token sales.
But while markets were down on the news, not everyone was apt to read the actions against ICOs as a negative.
Chen Weixing, an ICO investor and the former founder of transportation startup Kuaidi Dache, for example, sought to stress the global nature of blockchain, as well as the trials and tribulations of his own startup as reasons for downplaying the news.
"Many times the government announced we were illegal," Weixing said of his one-time ride-sharing startup. (His firm later merged with competitor Didi in 2015).
Weixing went on to talk broadly about the nature of technology and how government attempts to stop innovation generally proves to be a losing strategy.
Asked about the long-term impact, one local exchange operator hinted that it remains to be seen whether China can successfully crack down on ICOs given it was unable to halt domestic bitcoin trading despite severe restrictions.
However, the executive suggested the centralized nature of ICO fundraising could be a point of failure that makes it more susceptible to regulation.
For now, though, it seems time will need to provide clarity to such questions, with even ICO platforms suggesting they were awaiting further guidance on whether they might be able to proceed with their business in any capacity.
"We just waiting for regulators more instructions. If they want to close all ICO platforms, we don't have another choice."
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