2017.09.0422:45:00UTC+00Bitcoin Slides as PBOC Bans Initial Coin Offering Operations

Bitcoin posted its steepest drop since July after Chinese regulators deemed initial coin offerings to be illegal, with the central bank ordering all related fundraising activity to be stopped immediately.

Bitcoin fell by as much as 11.4 percent, the steepest decline since July, to $4, 326.75. Meanwhile, the ethereum currency fell by more than 16 percent on Monday, data from Coindesk showed.

Issuing the strongest regulatory hindrance to the emerging market for digital currency, the People's Bank of China announced that it had finished its probes into ICOs, declaring that it will penalize offerings in the future will imposing punitive actions on the ones already finished due to legal violations. The regulator added that those who have already raised money must provide refunds, but it did not give details how the money will be returned to investors.

The ban comes as authorities deemed the digital token sales as a threat to the country's financial market stability as regulators attempt to clampdown financial channels that go beyond the traditional banking system.

The regulator also said that digital currency financing and trading platforms are now restricted from conversing coins with fiat currencies. It also declared that tokens should not be utilized as currency on the market and banks should not offer services to ICOs.