Initial coin offerings are nothing but Ponzi schemes in e-business garb

By not reducing pollutants, firms harm themselves

PEOPLE’S BANK OF CHINA, the country’s central bank, along with banking and securities regulators and five other central government departments issued a joint statement on Monday banning individuals and organizations from raising funds through initial coin offerings (ICOs), or digital currency launches. Southern Metropolis Daily comments:

Individuals and organizations that have raised funds through ICOs are required to return them to the investors. The joint statement also says that since ICOs never obtained the authorities’ approval, they are illegal.

The prices of bitcoin and ethereum, which comprise the bulk of the crypto-currencies in China, slumped immediately after the statement was posted on the central bank’s website.

The ban ends a longtime controversy over ICOs, the main source of funds for a number of digital currency companies that described them as a financial innovation or part of digital economy. Such companies managed to raise large sums of money in no time by selling their selfcreated digital “tokens”, with some known to have raised $150 million through ICOs in just three hours.

And although the business grew at a fast pace for years with almost no supervision, its “model” was similar to Ponzi scheme, with some insiders saying its profit margin even dwarfs that of drug trafficking.

No country recognizes bitcoin as a currency, because it is only a virtual commodity in cyberspace and devoid of any value. In other words, the bitcoin is just a sign created by some people to make money in the fast lane. No wonder many developed countries have subjected bitcoins to the most meticulous scrutiny.

However innovative a financial process may be, it should not be exempted from regulatory oversight, lest it causes chaos in the financial sector and harms people’s interests. Therefore, all financial innovations must be well regulated and effectively monitored.

MORE THAN 54 PERCENT of some 41,928 enterprises across the country were found to have violated the environmental protection laws during the past five months, according to an ongoing inspection on air pollution by the Ministry of Environmental Protection. Beijing News commented on Tuesday:

That environmentally unfriendly production activities continue even after several rounds of nationwide inspection warrants tougher supervision and enforcement on heavy polluters. The inspection teams dispatched by the ministry will reportedly conduct research independent of local environmental authorities to rule out hidden favoritism.

The bitter truth is that government supervision, however targeted and efficient, is not likely to cover all polluting enterprises and factories. So the task of reducing industrial air pollution and promoting green industry falls mainly on local manufacturers themselves. And their reluctance to do so will push that goal further off the table.

In all likelihood, many heavy polluters either do not have waste-processing facilities or refrain from using them because their owners are either unaware of or refuse to take environmental protection measures, because they focus on short-term profits. Missing in their crude calculation is the fact that polluted air, water and land will take a heavy toll on society, and them as well.

Decades of exponential growth in China’s manufacturing has enriched a number of entrepreneurs, and they still believe the labor-intensive, polluting-prone development approach will keep bringing them profits. They should wake up to the fact that no one is immune to the consequences of environmental damage. That’s why the enforcement against environmental pollution will gain more force and consistency.

Instead of evading the enforcers, those running pollution-prone units must take rectification measures for their own good. Data show every year about 780 million metric tons of industrial solid waste is underused, meaning that about 25 billion yuan ($3.9 billion) goes down the drain. Using clean energy and energy-saving technologies may be a better way out.