Investing.com | Sep 04, 2017 06:01AM ET

Investing.com - Bitcoin and the other leading cryptocurrencies all sold off sharply on Monday, after , saying the practice constituted illegal fundraising.

The People’s Bank of China said in a statement earlier that it had completed investigations into ICOs, and will strictly punish offerings in the future while penalizing legal violations in ones already completed.

Individuals and organizations that have completed ICO fundraisings should make arrangements to return funds, the PBOC said, issuing the strongest regulatory challenge so far to the burgeoning market for digital token sales.

It also said digital token financing and trading platforms are prohibited from doing conversions of coins with fiat currencies.

The popularity of coin offerings has surged in China this year. ICOs have become a bonanza for digital currency entrepreneurs, allowing them to raise large sums quickly by creating and selling digital "tokens" with little or no regulatory oversight.

dropped to $4,345.70 by 6:00AM ET (1000GMT), down $249.30, or around 5.5%, after hitting a low of $4,253.00. The digital currency rallied to an all-time high of $4,911.80 over the weekend.

, Bitcoin's closest rival in terms of market cap, sank 11%, or $38.52, to $312.69. It briefly rose to a record peak of $394.78 on Saturday.

Other prominent cryptocurrencies such as , and also traded sharply lower.

The total value of all publicly traded cryptocurrencies was $150 billion, a figure that was down more than 16% from a high of nearly $180 billion reached on Saturday night.

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