A self-regulatory organization focused on online finance in China has issued a warning to its members on initial coin offerings (ICOs).

In a statement yesterday, the National Internet Finance Association of China warned that ICOs may be using misleading information as part of fundraising campaigns, urging investors to proceed with extreme caution. The group, which works with government agencies on regulatory matters, further stated its intention to toughen security measures.

The remarks further advised member companies to remain cautious when dealing with the nascent fundraising mechanism, stating:

The announcement by the group, established by the People’s Bank of China in 2016, may not be surprising given that ICOs have been subject to strict scrutiny by the regulator.

Already, the central bank is said to be drafting regulations which may seek to suspend all ICO activity. A draft of regulatory measures for ICOs was published last week that suggested they could be classified as illegal.

It seems some domestic ICO efforts are taking note. ICO website ICOINFO went so far as to announce a temporary suspension yesterday due to the uncertainty over regulations.

The group features more than 400 financial organizations, with notable members including online lender CreditEase and financial marketplace provider Lufax.

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