(Yicai Global) Sept. 28 -- The Monetary Authority of Macao issued a warning about the risks associated with virtual products and tokens on its official website yesterday.

It said that the relevant mainland Chinese authorities banned financial institutions and non-banking payment institutions from offering services related to initial coin offerings (ICOs) and virtual currencies following a rise in token-based financing activities and prevalent speculation.

The Monetary Authority of Macao sent a letter prohibiting all local banks and payment institutions from directly or indirectly engaging in such financial services on September 20.

Earlier this month, the People’s Bank of China and six other national ministries and commissions declared that ICOs are a form of illegal financing and put out an order for an immediate halt on related services.

An ICO is defined as an activity in which a financing entity raises virtual currencies such as bitcoin and Ethereum from investors by illegally offering digital tokens and putting them into circulation, they said. An ICO is a form of unauthorized public financing that may involve illegal fundraising, financial scams, pyramid schemes or the illicit offering of coins, token money or securities.

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