Chinese regulators have declared initial coin offerings (ICOs) as illegal and ordered an immediate ban on related fundraising activities in a bid to mitigate risks in the financial services sector.

The People’s Bank of China (PBoC) said it has concluded a probe into ICOs and will punish offerings in the future and breaches done in the past.

Firms that have already raised proceeds through ICOs would have to return the same to investors, said a joint statement from the PBoC, China Securities Regulatory Commission, the China Banking Regulatory Commission and the China Insurance Regulatory Commission.

At the same time, banks and other financial institutions have been barred from conducting ICO trading.

Currently, authorities have shortlisted 60 major domestic ICO platforms for inspection.

In July this year, the US Securities and Exchange Commission (SEC) warned that some ICOs were being used to sidestep the law and should be regulated like other stocks. Singapore and Canada soon issued similar cautions.