China drafts rules on cryptocurrency fundraising

The State Council, China’s cabinet, has released draft rules to oversee fundraising through virtual currencies amid surging investor interest in cryptocurrencies. The draft legislation, which builds on policies released in February 2016, was released by the State Council’s Legislative Affairs Office on Thursday. The policy document further clarifies the division of labor among regulators, and measures to prevent illegal fundraising as well as investigation procedures, Caixin reports. Initial coin offerings (ICOs), in which investors can use cash or other virtual currencies to obtain new cryptocurrency, attracted a record number of investors. In the first half of this year, more than 100,000 investors snapped up 2.6 billion yuan ($385 million) worth of new virtual currencies issued in China, according to a government-backed study. The actual number of ICOs and investors involved could be much higher, as the majority of ICO-related transactions take place through private funds that the study did not track. ICOs do not require a review process.