As if the embattled cryptocurrency industry did not have enough on its plate, with an almost 90% wipeout this year, China is continuing to shake its angry fists at all things crypto.

The latest digital asset class to come under the draconian hammer of Bejing is security token offerings (STOs). The People’s Bank of China (PBOC) has banned them, with deputy governor Pan Gongsheng saying they are no different to initial coin offerings (ICOs), according to local media reports.

Using the same rhetoric for STOs as the bank did for cryptocurrencies, it asserted that this method of investment and fundraising is ‘illegal financing’ in China.

Director of the Beijing Municipal Bureau of Local Financial Supervision, Huo Xuewen, also warned organizations against attempting these types of offerings. “I want to warn those who are promoting STO fundraising in Beijing. Don’t do it in Beijing. You will be kicked out if you do it,” he said at the recent 2018 Global Wealth Management Forum.

China still clearly views digital currency and anything associated with it as unnecessary evils with Gongsheng adding that “virtual money has become an accomplice to all kinds of illegal and criminal activities.”

Indeed a large percentage of ICOs have been revealed to be fraudulent in recent months, however China has chosen not to follow the path of neighbors Japan and South Korea, who are working on regulation rather than stifling the industry completely.

Security tokens differ from regular crypto tokens in that they usually derive their value from an external, tradable asset. Cryptocurrencies are designed to either be virtual money or based upon the digital ‘fuel’ for a new underlying technology or software platform such as Ethereum or EOS.

According to US regulators, crypto tokens that pass the Howey Test are deemed to be security tokens and thus subject to securities regulations.

The US Securities and Exchange Commission has been active in recent weeks regulating ICOs that are not securities, which some observers say has been the catalyst for the latest market slump.

In reality, however, markets move on a variety of fundamentals and the huge correction from the unnatural spike at the beginning of the year is still likely to be occurring.