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Alibaba's Taobao Bars Crypto, ICO Services In Policy Update

Taobao, the internet shopping site under the e-commerce giant Alibaba, has updated its list of prohibited goods and services on the platform, which now includes those related to cryptocurrencies.

In its latest update released on Tuesday, the site is now formally banning individual stores on its platform from providing services related to initial coin offerings (ICOs), such as technological development, marketing, and business proposal writing, among others.

To be effective starting from April 17, the new rules also aim to extend the platform’s existing self-regulatory scope from previously banning the sale of individual virtual currencies to now any service or product that derives from a blockchain technology, including crypto-pets.

Meanwhile, the existing prohibition on selling cryptocurrency mining chips and offering mining tutorials remains unchanged.

Citing the notable clampdown by the People’s Bank of China last September on ICOs in the country, Taobao stated that stores that violate the new rules by continuing offering these services will be punished.

Notably, various services related to ICOs have remained active among individual stores on Taobao after the PBoC ban last year, some of which knowingly helped ICO projects draw up white papers with fake information.

Currently searching by the term “Whitepaper” in Chinese characters could still lead to stores that offer white-paper copywriting services for blockchain and ICO fundraising activities. However, the term used by these stores has been slightly disguised and is rephrased as “I.CO”

Taobao’s new ruling also makes it the latest internet platform to withdraw from offering a stage to ICOs and blockchain related projects, following recent bans on cryptocurrency-related ads by social media giants such as Google, Facebook and Twitter.

Taobao image via Shutterstock

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PBoC Advisor: 'China Was Right to Ban ICOs'

An advisor to China’s central bank said he supports the recent government crackdown on domestic initial coin offerings (ICOs).

As previously reported by CoinDesk, the People’s Bank of China and other regulators in the country moved in early September to restrict new offerings that utilize the funding model, through which parties can issue digital tokens that are cryptographically tied to a blockchain in order to raise funds or create a network effect for that project.

In announcing the ban, China declared the method a form of illegal financing, triggering a range of platform closures and efforts to refund investor contributions. According to Sheng Songcheng, counselor to the PBoC and an adjunct professor of economics and finance at the China Europe International Business School, the Chinese government made the right move.

Writing for Chinese-language newspaper Caixin, Songcheng – who previously said that the government should mandate disclosure standards for ICO organizers – argued that the crackdown was necessary in order to inhibit the “chaos” caused by unfettered finance.

He wrote:

“I fully agree with the move to ban ICOs in China, and the calls for refunds to be made to investors. In my opinion, these actions are largely aimed at averting risk and protecting investors’ interests while also being an opportunity to further regulate trading of virtual currencies. Still, it is important for China to continue to encourage the current development direction of blockchain technology.”

Likening ICO-derived tokens to securities – a connection advanced by a growing number of regulators worldwide – Songcheng said that the push for refunds was a “fair one” through the lens of investor and consumer protection. He went on to suggest that regulators there could put in place new guidelines for the model so that “everyone plays by the new rules of the game.”

In the op-ed, Songcheng called for tighter rules around bitcoin trading, though he also acknowledged that “bitcoin is a globalized asset, and so it is hard to ban it completely.” Instead, regulators should hone in on its use for money laundering in particular.

Lastly, the PBoC advisor wrote that “blockchain technology itself is worthy of encouragement” from regulators, highlighting the work by companies like Alibaba in this area as examples that the government should promote.

“With the ICO chaos being cleaned up, the blockchain community will itself attach more importance to identifying solutions to existing problem and technology, and the blockchain industry will see more prudent development,” he concluded.

Image via Shutterstock

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