Business

Ed Drake

Alibaba-owned Taobao outlaws ICOs, cryptocurrency

Online shopping platform Taobao has prohibited stores from promoting initial coin offerings (ICOs), cryptocurrencies, and other related goods and services, as part of an update rolled out earlier this week.

The platform, which is owned by eCommerce giant Alibaba, updated its list of banned goods and services to include cryptocurrency-related services and products, such as support services for ICOs.

The ban extends as far as services offering to help with marketing ICOs and even drafting business proposals, as the site looks to claim down on ICO and crypto-related stores within its marketplace.

Coming into effect from April 17, the updated rules effectively outlaw any product or service based on or derived from blockchain technology from being sold through their site—a significant expansion in Taobao’s on-platform regulation around cryptocurrencies.

Previous measures that were introduced to limit the sale of cryptocurrencies, mining hardware and tutorials will continue to have effect alongside the new measures when they come into force next week.

The move follows the decision of regulators in China to restrict ICOs in 2017, and Taobao has said it will punish store holders in breach of the provisions when they begin to take effect.

Despite the national ICO ban, first announced by the Chinese government in September, a number of services have remained on the Taobao platform, including some which have been identified as helping draft fake ICO documentation.

At press time, there were still a number of services offering help with drafting ICO white papers, as well as several other support services for ICOs and cryptocurrency products, suggesting a number of individual sellers have yet to yield to the change in policy.

The decision brings Taobao in line with a number of other online platforms that have limited available outlets for those participating in unregulated ICOs and support functions. It follows similar steps by Google, Twitter and Facebook in limiting ICO services from using their platforms.

Initial coin offerings exploded in popularity over 2017, with a variety of different projects put forward for new tokens and cryptocurrencies.

However, following crackdowns from regulators international, including the U.S. Securities and Exchange Commission, and more robustly, regulators in China, the net is now closing in on those intent on using ICOs illegitimately or fraudulently.

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