Initial coin offerings (ICOs) have raised over US$1.5 billion in 2017 with 65 launches in China totaling 2.6 billion CNY, or US$389 million. But a notice from a committee led by the People’s Bank of China released earlier this week brought the multimillion-dollar industry to a halt.

On Monday, the central bank ordered an immediate ban on fundraising through ICOs, deeming these as unauthorized activities that may be used for fraudulent activities including scams and pyramid schemes. The authority urged the termination of all ICOs, and imposed companies that had raised funds through ICOs to refund investors.

The committee also provided a list of 60 major ICO platforms that will be subject to inspection and a report, according to news service Caixin.

At least two major Chinese exchanges ceased ICO operations last week, and a conference discussing blockchain technology was shut down over the weekend over concerns about ICOs, according to Caixin sources.

David Moskowitz, the co-founder and CEO of Indorse, a reward-based professional network on the Ethereum network, welcomed the Chinese government’s efforts to protect consumers, noting that ICO scams were rampant in China. “Given the speculative environment surrounding ICOs in China it is understandable that the authorities are looking at ways to safeguard consumers,” Moskowitz said.

Over the weekend, the cryptocurrency market lost nearly 20% of its entire market capitalization. The price of bitcoin fell 18% by Tuesday from an all-time high of nearly US$5,000, while ether fell 30%.

But the most heavily affected tokens being those born from ICOs, according to Perry Woodin, CEO of Node40, a company that provides accounting software for individuals and businesses that deal with cryptocurrencies.

“After the US Securities and Exchange Commission (SEC) published its July 25th investor bulletin on ICOs, it comes as no surprise that financial regulators in other countries are defining strict prohibitions against ICOs,” he said. “It will be interesting to see what effect this prohibition in China has on current and upcoming ICOs.”

For Trevor Koverko, the CEO of Polymath, a startup that’s building a platform that makes it easier and more affordable for companies to issue their own “securities tokens,” the Chinese ruling on ICOs ” is a gift for the rest of us.”

“Blockchain projects are distributed by definition and they will gravitate towards jurisdictions that welcome them and support them,” Koverko said.

“Companies that conduct ICOs are speaking with regulators in various jurisdictions everyday, and welcome an open dialogue. Guidelines are being worked on, and they are needed, but it’s important to note that ICOs are here to stay. The question is: where will they go?”

Luis Cuende, the co-founder and project lead of Aragon, agrees. While some countries and incumbents will “try to shut down this movement, and come to unreasonable extremes in order to do so,” others will embrace token sales and crypto in general, “creating jurisdictional competition, and forcing the incumbents to be reasonable,” Cuende said.

“We’re also in a very extreme moment for ICOs where a lot of scam projects are happening, and that will also ease as the market matures. I’m very bullish about everything that’s happening, and not surprised at all,” he said.

The ICO ban in China comes at a time when regulators around the world are looking to regulate the controversial practice. The SEC issued a warning on ICOs in July, stating that the offering and sale of digital tokens “are subject to the requirements of the federal securities law.”

Earlier this month, a joint task force meeting with digital currency-related institutions and regulators in South Korea discussed possible measures and rulings for digital currency activities. In addition to demanding enhanced user authentication procedures and highlighting the need to improve laws and systems, financial authorities said they will punish ICOs for violating the capital market act, reports Business Korea.