 fell sharply on Monday, after the Chinese government declared initial coin offerings illegal.){kind=link}
The value of crypto-currency Bitcoin (CURRENCY:BTC) fell sharply on Monday, after the Chinese government declared initial coin offerings illegal.
Crypto-currency Bitcoin topped the $5,000 (£3,862) threshold for the first time on Sunday.
The value of Bitcoin has steadily been on the up in the last year, topping the value of gold back in May and surpassing $1,000 back in January of this year.
However in a blow for the market leader, The People’s Bank of China has declared initial coin offerings (ICOs) illegal and called for them to “cease immediately”, as part of its crackdown on fundraising for cryptocurrencies.
The news sent the two leading crypto-currencies shares down, with Bitcoin falling $200 on Monday.
Given the unregulated nature of the crypto-currency market, regulators remain concerned of the risks entailed with ICOs.
Back in July, The US Securities and Exchange Commission suggested that financial fundraising for the currencies should be more closely scrutinised.
Moreover, an unregulated currency remains liable to exploitation by criminals on the dark web, as it facilitates anonymity in its dealings.
“The innovative technology behind these virtual transactions does not exempt securities offerings and trading platforms from the regulatory framework designed to protect investors and the integrity of the markets,” said Stephanie Avakian, the SEC enforcement co-director back in July.
Bitcoin currently has the highest market capitalisation of the currencies, followed by rival Ethereum.
Cryptocurrencies continue to gain in mainstream popularity, with two private preschools in New York announcing they will be accepting payment for tuition fees in Bitcoin back in June.
Moreover, financial titans such as JP Morgan (NYSE:JPM) have increasingly sought to invest in the market, developing a blockchain alliance with Ethereum named Quorum.
Nevertheless, the unregulated currencies have nonetheless continue to face a considerable amount of hurdles, alongside the most recent ruling by Chinese regulators.
Earlier this year, a highly anticipated ruling by the U.S. Securities and Exchange Commission (SEC) unexpectedly denied a rule change that would have allowed the Winklevoss Bitcoin Trust ETF to commence trading on the Bats BZX Exchange.