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7 years later, the $4.2 billion largest funding project in history announced its failure
Today, EOS has rebranded to Vaulta.
The ancient public blockchain that made a grand entrance seven years ago with a year-long extravagant fundraising, once hailed as an early "Ethereum killer," has finally abandoned its dream of achieving millions of TPS and announced a shift towards Web3 banking. The grandiosity of its $4.2 billion fundraising, the buzz of 21 super node elections, and the utopian declaration of a million TPS have now been pieced together as the most expensive idealistic experiment in blockchain history.
Seven years later, apart from long-time hodlers, no one mentions this "ancient public blockchain" that now ranks 97th by market capitalization. Going forward, EOS is no longer a high-performance public chain; it has undergone a transformation, attempting to pivot towards Web3 banking business—it has relinquished its once-proud dreams, even forsaking its name.
We use this article to document the most insane product of the ICO era, one that burned so much money, leaving behind a poignant story.
A Tower of Babel Built with Code and Dollars
In 2017, the blockchain industry was experiencing its wildest bull run. Bitcoin surpassed $1,000 in early January and skyrocketed to $20,000 by the year's end. Ethereum's smart contracts completely transformed the crypto world, and ICOs (Initial Coin Offerings) became the hottest fundraising method, with hundreds of projects flooding the market, all striving to build a "decentralized future."
Amidst this capital frenzy, EOS emerged with the banner of "Blockchain 3.0," raising the flag of "Ethereum Killer." Its whitepaper depicted an ideal world: a million TPS (transactions per second) to completely solve Bitcoin and Ethereum's scalability issues; zero transaction fees so that regular users wouldn't have to pay expensive gas fees, making on-chain transactions as smooth as cloud applications; ultra-fast block production, with 21 super nodes responsible for transaction processing, no longer hampered by miner competition; a blockchain supercomputer to make decentralized applications (DApps) a reality.
Founder BM (Dan Larimer) was EOS's biggest asset. For the tech-savvy, he was a genius—suggesting a change to the consensus mechanism to Satoshi Nakamoto just a year after Bitcoin's launch, arguing that PoW (Proof of Work) was not efficient. Later, he created BitShares and Steemit, becoming one of the most well-known engineers in the crypto world. But BM was not just a tech geek; he also had utopian idealism. He believed that blockchain could change everything, and EOS would be the ultimate solution for human societal structure.
With a brilliant CTO and a top-notch marketing team, the ambition of this story was already on the table. On June 26, 2017, EOS began its crowdfunding, planned to last for a year (in contrast, most ICO fundraising periods lasted only weeks to a few months).
Global investors flocked in and raised 185 million USD within 24 hours. In the end, EOS successfully raised 4.2 billion USD, becoming the largest fundraising in the history of the crypto world, far surpassing all projects at the time, including Ethereum's 18.5 million USD.
Top 10 ICO Projects of 2018
With 4 billion USD, EOS leaped to become a super capital entity in the crypto world.
In April 2018, EOS's price surged from 5 USD to 23 USD, a 360% monthly increase, propelling its market value into the global top five, second only to Bitcoin, Ethereum, Ripple, and Bitcoin Cash. Media hype escalated, with headlines such as "EOS Will Become the First Trillion-Dollar Cryptocurrency" and "BM Is the Next Satoshi Nakamoto" flooding the scene. Ethereum developers also began to feel anxious, fearing that EOS's rise would lead to Ethereum's decline.
During this year, before the EOS mainnet launch, it had already become the hottest star in the crypto world. Driven by the FOMO (fear of missing out) emotion, EOS was considered the "next-generation Ethereum," with some even predicting it would reach 1,000 USD.
The Super Node election became a global sensation, with key figures like Li Xiaolai, Lao Mao, and other "godfather-level" individuals making high-profile entries. Exchanges, mining pools, Wenzhou Capital, and even traditional funds flocked in — this election was dubbed the "Wall Street IPO of the blockchain." The three countries of China, the U.S., and South Korea engaged in a "crypto country war," with the Korean community chanting, "Not investing means not being Korean." Li Xiaolai's Coin Capital held four nodes, while the Wenzhou group entered with an eight-figure EOS spree.
With a 4 billion USD fundraising, a star-studded project, a dark horse public chain, garnering attention from all quarters, and BM being picked up in a luxury car by the project team at the Hong Kong airport, everything seemed so perfect. However, beneath the grandeur, everything was built on a tower of code and dollars.
EOS's Peak Was Only the Beginning
Amidst fervent enthusiasm, issues had already quietly emerged:
EOS's voting system was questioned for being easily controlled by whales, the decentralization of the Super Nodes was doubted; post mainnet launch, various technical issues arose, developers began to question EOS's stability; deep involvement of exchanges and capital giants made the Super Node election no longer fair, and the community began to have differing voices; after BM launched the mainnet, frequent changes to the governance mechanism caused community turmoil.
However, at that time, the market was still immersed in euphoria, and all doubts were overshadowed by the slogan "EOS is about to change the world." During that golden age, everyone believed that EOS would become the future overlord, even the ultimate form of the blockchain industry. However, reality is often crueler than dreams, and no one anticipated that this once highly anticipated project would fall from grace in just a few years.
Tech Disillusionment: From "Million TPS" to "Distributed Database"
At that time, the biggest problem facing blockchain was scalability, how to process more transactions per second. The Bitcoin network could handle 5 or 6 transactions per second, and Ethereum was a bit better, at roughly 20 transactions per second. However, these numbers were far from sufficient for blockchain's usage requirements.
In this context, EOS's million TPS capability drove everyone crazy. It's worth noting that during Alibaba's Double 11, the peak transaction volume was hundreds of thousands per second.
However, after the EOS mainnet had been live for 4 months, the highest TPS reached was only 3996, far from the promised million.
While EOS fell far short of expectations, on the other hand, Ethereum gradually improved its performance through Layer 2 scaling solutions, and competing chains like BNB and Solana quickly rose to prominence, completely erasing EOS's "performance advantage."
People discovered that the so-called "million TPS" was actually a carefully crafted word magic trick—BM quietly added a premise to this number: it must rely on an infinitely scalable sidechain ecosystem. In his vision, if one chain could handle 4000 transactions, 100 parallel sidechains could achieve 400,000 TPS. However, in reality, by 2023, the EOS ecosystem only had 3 sidechains live, with two becoming "ghost chains" due to developer exodus. BM's response to this was to pivot on Twitter, announcing that he was "studying anti-inflation algorithms," while at this point, EOS had fallen out of the top 20 by market cap.
Usability was the core issue with EOS.
Initially, EOS hit a user pain point with free transactions. Users quickly found out that while EOS transactions were feeless, they had to stake tokens to exchange for CPU resources. During network congestion, transferring 10 EOS required staking the equivalent of 5 EOS in CPU resources—essentially a form of freezing user funds. During a DApp traffic peak in 2020, 2000 EOS could only exchange for 1.3 seconds of CPU time; regular users needed to repeat the process more than ten times to complete a transaction.
Furthermore, BM also set a RAM supply limit, which led to RAM speculation in the market, causing RAM prices to skyrocket by 100 times. Developers had to spend a high cost to purchase storage resources. In 2018, some speculators started hoarding RAM, and within a few months, the RAM price surged from 0.01 EOS/KB to 0.9 EOS/KB, severely impacting DApp development, with many new projects directly giving up on EOS.
Ultimately, this resource management model made EOS's user experience even worse than Ethereum's: on Ethereum, users can directly pay Gas fees to complete transactions; but on EOS, users must first learn complex resource staking mechanisms, and even have to spend a hefty price to buy CPU and RAM, leading to a severe hindrance in DApp ecosystem development.
From today's perspective, it is actually difficult to understand how, despite such a poor user experience, EOS had a boom period in late 2018 and early 2019: DApps mainly focused on on-chain gambling were very popular on EOS.
On December 24, 2018, data showed that in the past week, comparing the overall DApp ecosystem of the top three public chains ETH, EOS, and TRON, the following were observed: Total number of users: EOS (75,346) > TRON (45,777) > ETH (33,495); Total number of transactions: EOS (23,878,369) > TRON (13,803,322) > ETH (413,019); Total transaction volume (USD): EOS ($345,489,773) > TRON ($135,201,171) > ETH ($44,272,856);
This indicates that at that time, the EOS community indeed had high expectations, and its ecosystem surpassed ETH and TRON. Perhaps it was this "daydream," which now makes veteran players in the crypto space nostalgic when recalling EOS.
Governance Failure: Vote Buying, Centralization, and Community Division
Of course, when we talk about governance now, it seems we can only smile wryly, but at that time, EOS's governance was highly anticipated. BM firmly believed that under his careful design, 21 nodes would make this network far superior to Ethereum.
He believed this network would have 2/3 good actors, everyone's behavior would be benevolent, and nodes behaving in bad faith would be voted out by the users. It was a perfect utopia. In reality, he was overly naive.
After 3 months since the EOS mainnet went live, node mutual voting has become an unwritten rule. In order to receive EOS block rewards, no one can stop the mutual voting between whales and nodes. What is even more outrageous is that the nodes themselves engage in misconduct.
EOS operates with a mechanism where 21 super nodes take turns producing blocks. At one point, a user had their funds stolen by a hacker. The solution was for the 21 nodes to blacklist the hacker's address to prevent further transfers. This was a normal and simple operation, but one of the nodes did not comply. As a result, the hacker was able to transfer the funds while that particular node was producing blocks, acting as if nothing had happened.
Brendan Blumer (BM) once attempted to regulate these behaviors through an EOS constitution but quickly found that the constitution had no teeth. Since the super nodes themselves benefit from bribery, they have no incentive to enforce the rules outlined in the constitution. The arbitration mechanism is completely ineffective and lacks any real enforceability.
In 2019, BM completely abandoned constitutional governance and announced that the EOS community should evolve freely without interfering with the election of super nodes. By 2020, EOS's super nodes had devolved into a battleground for exchanges, mining pools, and capital conglomerates, rendering the votes of ordinary token holders meaningless. Delegated Proof of Stake (DPoS) was supposed to be a model of decentralized governance but has turned into a version of oligarchic politics in the crypto sphere.
On the governance front, EOS faced a major issue: before the EOS mainnet went live, BM proposed an innovative "EOS Constitution" aiming to use code plus rules to constrain behavior on the network. However, within a few short months, the constitution underwent multiple revisions, leading to growing community discontent. In June 2018, EOS's original constitution allowed super nodes to arbitrate transactions, but due to power abuse, BM decided to amend the constitution weeks later, prohibiting nodes from intervening in transactions. In 2019, BM suddenly suggested abolishing the constitution and switching to "user contract governance," throwing the community into chaos as they were unsure how EOS's governance rules would evolve. This ever-changing governance model caused developers and investors to completely lose trust in EOS.
During this crisis, BM and Block.one (EOS's parent company) gradually shifted their focus from the EOS main chain to the EOSIO software. BM believed that "the future of blockchain lies in enterprise applications," thus starting to promote EOSIO for enabling enterprises to build their own private chains rather than focusing on optimizing the EOS public chain. Core updates to the EOS main chain almost came to a halt, with many crucial upgrades like cross-chain functionality and storage expansion being delayed.
As a result, EOS's developer ecosystem experienced a sharp decline: while the Ethereum community thrived with high activity and the emergence of applications like DeFi and NFTs, the number of DApp developers on EOS gradually decreased. By 2022, EOS was losing nearly 100 developers per month, and some EOS browser and wallet projects even shut down permanently.
External Strangulation: Miner Exodus, Bear Market, and Block.one's Silence
By the end of 2019, the price of EOS had dropped below $5, reaching a low of $1.8 the following year, plummeting over 90% from its all-time high of $23. As super nodes faced a survival crisis, developers fled, and market liquidity dried up, the EOS ecosystem was in desperate need of help from its parent company, Block.one.
As we all know, early on, Block.one raised $4 billion, becoming the largest funding event in crypto history. In theory, this funding could support the long-term development of EOS, support developers, drive technological innovation, and sustain ecosystem growth. When the EOS ecosystem developers begged for assistance, Block.one produced a $50,000 check—a sum of money that wouldn't even cover two months' salary for a Silicon Valley programmer.
"Where did the $4 billion go?" the community asked.
In an email sent on March 19, 2019, by BM to Block.one shareholders, part of the answer was revealed: as of February 2019, Block.one's total assets (including cash and invested funds) amounted to $3 billion.
Of this $3 billion, around $2.2 billion was invested in US government bonds, which in the email were also referred to as "liquid fiat assets."
Some information about the invested funds can be found in public records: game company Forte, NFT platform Immutable, and a vacation hotel in Puerto Rico, among others. In summary, the companies that were invested in all had one thing in common: they had little to do with EOS.
Even before Bullish became a core business, Block.one still held an ace—the social product Voice, deployed based on EOSIO smart contracts, which was the only product related to EOS. To build Voice, Block.one invested $150 million. Additionally, the largest expense was $30 million spent on acquiring a domain name, with the seller being MicroStrategy, the publicly traded company holding the most bitcoin, as mentioned earlier.
However, it seemed to be a curse of fate. The first launch event for Voice lasted half an hour, did not meet expectations, and received much disappointment, causing the price of EOS to drop consequently. Half a year later, on the day Voice's iOS version was launched on the Apple Store, various malfunctions and Bdangsug occurred. The Voice website displayed "Error 1020" and stated the site was "using a security service to protect itself from online attacks." EOS holders were utterly disappointed, and Voice finally announced in September 2023 that it would gradually shut down.
Project Launched by Block.one
The thunder is loud but the rain is sparse, which seems to be Block.one's consistent style when it comes to investment in projects. Since then, Block.one has not made any major investment moves and has fully embraced a low-key approach. Today, Block.one holds 164,000 bitcoins, indicating that its net worth has grown from $3 billion in 2019 to the current $16 billion, a fivefold increase, making it a liquidity management master.
Without any concrete DeFi, NFT, or DApp ecosystem support plans, in stark contrast, the Ethereum Foundation and Solana Foundation have been continuously subsidizing developers to drive technological innovation, while Block.one has done almost nothing.
An early EOS investor expressed anger on Reddit, questioning, "When we invested in EOS, it was because it promised to disrupt the blockchain, not to let Block.one use this money to speculate on Bitcoin!"
Although Block.one currently holds the second-largest amount of Bitcoin after MicroStrategy, with a total of 160,000 BTC worth $16 billion, EOS, which has received no support from these massive funds, continues on a downward trajectory.
The governance chaos at Block.one is even more astonishing. Block.one is increasingly resembling a "family business" centered around CEO BB, with BM not part of this family.
Sister as CMO: CEO Brendan Blumer's sister, Abby, was parachuted in as Chief Marketing Officer, and her only visible "achievement" was to change the EOS brand color from tech blue to a "softer Pantone Cool Gray."
Mother in Venture Capital: Blumer's mother, Nancy, runs the EOSVC venture capital fund, and the social app Voice, which she led, has been online for a year with less than 10,000 users, despite burning through $150 million.
BM's Puppet Show: Founder BM confessed on Twitter that he has "no decision-making power" and can only watch as the team pours resources into the enterprise-grade toolkit EOSIO — a project tailored for giants like Walmart, completely unrelated to the EOS mainnet.
In 2021, the community initiated the "Forking Rebellion" to try to sever Block.one's control. The EOS Foundation, as a community representative, stepped forward to negotiate with Block.one. However, after a month of discussions where various solutions were explored but not agreed upon, the EOS Foundation, in conjunction with 17 nodes, revoked Block.one's power and removed them from the EOS leadership. Without its parent company, EOS started to resemble more and more a DAO.
Following the split between EOS and Block.one, the EOS community engaged in a years-long legal battle over the ownership of the funds raised initially. As of now, Block.one still retains ownership and control over the funds.
Even more ridiculously, since 2024, BM's Twitter content has almost completely veered away from blockchain topics, with the only technical discussion being sporadic mentions of database optimization. Instead, his focus has shifted entirely to theological evangelism, with content heavily concentrated on interpreting the Bible, world-ending prophecies of geopolitical conflicts, and criticisms of mainstream Christianity...
BM's Twitter content
Looking back at this seven-year-long crypto epic, EOS's collapse serves as a stark warning: no matter how high the TPS, how sophisticated the resource model, or how complex the user experience to the point of deterring the average person, it will all be meaningless. The once self-proclaimed "Ethereum Killer" ultimately perished in the quagmire of its own economic model, governance chaos, and technological stagnation.
Seven years ago, EOS raised a whopping $4 billion in crowdfunding, once hailed as the most glorious financing miracle in blockchain history; seven years later, its story has become one of the biggest "jokes" in the crypto world.
In the end, EOS did not kill Ethereum; it killed itself first.
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China's Central Bank and Eight Other Departments' Latest Regulatory Focus: Key Attention to RWA Tokenized Asset Risk
Foreword: Today, the People's Bank of China's website published the "Notice of the People's Bank of China, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:
To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:
Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:
(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.
The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.
A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.
（II）Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.
Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.
(III) Inter-agency Coordination. The People's Bank of China, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.
The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.
(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.
(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.
(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.
(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.
(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.
（IX） Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.
（X） Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.
（XI） Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.
（XII） Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.
（XIII） Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.
（XIV） Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.
(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.
(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.
(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.
(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.
(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.
This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.
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China's Central Bank and Eight Other Departments' Latest Regulatory Focus: Key Attention to RWA Tokenized Asset Risk
Foreword: Today, the People's Bank of China's website published the "Notice of the People's Bank of China, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration for Market Regulation, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, State Administration of Foreign Exchange on Further Preventing and Dealing with Risks Related to Virtual Currency and Others (Yinfa [2026] No. 42)", the latest regulatory requirements from the eight departments including the central bank, which are basically consistent with the regulatory requirements of recent years. The main focus of the regulation is on speculative activities such as virtual currency trading, exchanges, ICOs, overseas platform services, and this time, regulatory oversight of RWA has been added, explicitly prohibiting RWA tokenization, stablecoins (especially those pegged to the RMB). The following is the full text:
To the people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, the Xinjiang Production and Construction Corps:
Recently, there have been speculative activities related to virtual currency and Real-World Assets (RWA) tokenization, disrupting the economic and financial order and jeopardizing the property security of the people. In order to further prevent and address the risks related to virtual currency and Real-World Assets tokenization, effectively safeguard national security and social stability, in accordance with the "Law of the People's Republic of China on the People's Bank of China," "Law of the People's Republic of China on Commercial Banks," "Securities Law of the People's Republic of China," "Law of the People's Republic of China on Securities Investment Funds," "Law of the People's Republic of China on Futures and Derivatives," "Cybersecurity Law of the People's Republic of China," "Regulations of the People's Republic of China on the Administration of Renminbi," "Regulations on Prevention and Disposal of Illegal Fundraising," "Regulations of the People's Republic of China on Foreign Exchange Administration," "Telecommunications Regulations of the People's Republic of China," and other provisions, after reaching consensus with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, and with the approval of the State Council, the relevant matters are notified as follows:
(I) Virtual currency does not possess the legal status equivalent to fiat currency. Virtual currencies such as Bitcoin, Ether, Tether, etc., have the main characteristics of being issued by non-monetary authorities, using encryption technology and distributed ledger or similar technology, existing in digital form, etc. They do not have legal tender status, should not and cannot be circulated and used as currency in the market.
The business activities related to virtual currency are classified as illegal financial activities. The exchange of fiat currency and virtual currency within the territory, exchange of virtual currencies, acting as a central counterparty in buying and selling virtual currencies, providing information intermediary and pricing services for virtual currency transactions, token issuance financing, and trading of virtual currency-related financial products, etc., fall under illegal financial activities, such as suspected illegal issuance of token vouchers, unauthorized public issuance of securities, illegal operation of securities and futures business, illegal fundraising, etc., are strictly prohibited across the board and resolutely banned in accordance with the law. Overseas entities and individuals are not allowed to provide virtual currency-related services to domestic entities in any form.
A stablecoin pegged to a fiat currency indirectly fulfills some functions of the fiat currency in circulation. Without the consent of relevant authorities in accordance with the law and regulations, any domestic or foreign entity or individual is not allowed to issue a RMB-pegged stablecoin overseas.
（II）Tokenization of Real-World Assets refers to the use of encryption technology and distributed ledger or similar technologies to transform ownership rights, income rights, etc., of assets into tokens (tokens) or other interests or bond certificates with token (token) characteristics, and carry out issuance and trading activities.
Engaging in the tokenization of real-world assets domestically, as well as providing related intermediary, information technology services, etc., which are suspected of illegal issuance of token vouchers, unauthorized public offering of securities, illegal operation of securities and futures business, illegal fundraising, and other illegal financial activities, shall be prohibited; except for relevant business activities carried out with the approval of the competent authorities in accordance with the law and regulations and relying on specific financial infrastructures. Overseas entities and individuals are not allowed to illegally provide services related to the tokenization of real-world assets to domestic entities in any form.
(III) Inter-agency Coordination. The People's Bank of China, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of virtual currency-related illegal financial activities.
The China Securities Regulatory Commission, together with the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the State Administration of Foreign Exchange, and other departments, will improve the work mechanism, strengthen coordination with the Cyberspace Administration of China, the Supreme People's Court, and the Supreme People's Procuratorate, coordinate efforts, and overall guide regions to carry out risk prevention and disposal of illegal financial activities related to the tokenization of real-world assets.
(IV) Strengthening Local Implementation. The people's governments at the provincial level are overall responsible for the prevention and disposal of risks related to virtual currencies and the tokenization of real-world assets in their respective administrative regions. The specific leading department is the local financial regulatory department, with participation from branches and dispatched institutions of the State Council's financial regulatory department, telecommunications regulators, public security, market supervision, and other departments, in coordination with cyberspace departments, courts, and procuratorates, to improve the normalization of the work mechanism, effectively connect with the relevant work mechanisms of central departments, form a cooperative and coordinated working pattern between central and local governments, effectively prevent and properly handle risks related to virtual currencies and the tokenization of real-world assets, and maintain economic and financial order and social stability.
(5) Enhanced Risk Monitoring. The People's Bank of China, China Securities Regulatory Commission, National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Public Security, State Administration of Foreign Exchange, Cyberspace Administration of China, and other departments continue to improve monitoring techniques and system support, enhance cross-departmental data analysis and sharing, establish sound information sharing and cross-validation mechanisms, promptly grasp the risk situation of activities related to virtual currency and real-world asset tokenization. Local governments at all levels give full play to the role of local monitoring and early warning mechanisms. Local financial regulatory authorities, together with branches and agencies of the State Council's financial regulatory authorities, as well as departments of cyberspace and public security, ensure effective connection between online monitoring, offline investigation, and fund tracking, efficiently and accurately identify activities related to virtual currency and real-world asset tokenization, promptly share risk information, improve early warning information dissemination, verification, and rapid response mechanisms.
(6) Strengthened Oversight of Financial Institutions, Intermediaries, and Technology Service Providers. Financial institutions (including non-bank payment institutions) are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities, issuing and selling financial products related to virtual currency, including virtual currency and related financial products in the scope of collateral, conducting insurance business related to virtual currency, or including virtual currency in the scope of insurance liability. Financial institutions (including non-bank payment institutions) are prohibited from providing custody, clearing, and settlement services for unauthorized real-world asset tokenization-related business and related financial products. Relevant intermediary institutions and information technology service providers are prohibited from providing intermediary, technical, or other services for unauthorized real-world asset tokenization-related businesses and related financial products.
(7) Enhanced Management of Internet Information Content and Access. Internet enterprises are prohibited from providing online business venues, commercial displays, marketing, advertising, or paid traffic diversion services for virtual currency and real-world asset tokenization-related business activities. Upon discovering clues of illegal activities, they should promptly report to relevant departments and provide technical support and assistance for related investigations and inquiries. Based on the clues transferred by the financial regulatory authorities, the cyberspace administration, telecommunications authorities, and public security departments should promptly close and deal with websites, mobile applications (including mini-programs), and public accounts engaged in virtual currency and real-world asset tokenization-related business activities in accordance with the law.
(8) Strengthened Entity Registration and Advertisement Management. Market supervision departments strengthen entity registration and management, and enterprise and individual business registrations must not contain terms such as "virtual currency," "virtual asset," "cryptocurrency," "crypto asset," "stablecoin," "real-world asset tokenization," or "RWA" in their names or business scopes. Market supervision departments, together with financial regulatory authorities, legally enhance the supervision of advertisements related to virtual currency and real-world asset tokenization, promptly investigating and handling relevant illegal advertisements.
（IX） Continued Rectification of Virtual Currency Mining Activities. The National Development and Reform Commission, together with relevant departments, strictly controls virtual currency mining activities, continuously promotes the rectification of virtual currency mining activities. The people's governments of various provinces take overall responsibility for the rectification of "mining" within their respective administrative regions. In accordance with the requirements of the National Development and Reform Commission and other departments in the "Notice on the Rectification of Virtual Currency Mining Activities" (NDRC Energy-saving Building [2021] No. 1283) and the provisions of the "Guidance Catalog for Industrial Structure Adjustment (2024 Edition)," a comprehensive review, investigation, and closure of existing virtual currency mining projects are conducted, new mining projects are strictly prohibited, and mining machine production enterprises are strictly prohibited from providing mining machine sales and other services within the country.
（X） Severe Crackdown on Related Illegal Financial Activities. Upon discovering clues to illegal financial activities related to virtual currency and the tokenization of real-world assets, local financial regulatory authorities, branches of the State Council's financial regulatory authorities, and other relevant departments promptly investigate, determine, and properly handle the issues in accordance with the law, and seriously hold the relevant entities and individuals legally responsible. Those suspected of crimes are transferred to the judicial authorities for processing according to the law.
（XI） Severe Crackdown on Related Illegal and Criminal Activities. The Ministry of Public Security, the People's Bank of China, the State Administration for Market Regulation, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, as well as judicial and procuratorial organs, in accordance with their respective responsibilities, rigorously crack down on illegal and criminal activities related to virtual currency, the tokenization of real-world assets, such as fraud, money laundering, illegal business operations, pyramid schemes, illegal fundraising, and other illegal and criminal activities carried out under the guise of virtual currency, the tokenization of real-world assets, etc.
（XII） Strengthen Industry Self-discipline. Relevant industry associations should enhance membership management and policy advocacy, based on their own responsibilities, advocate and urge member units to resist illegal financial activities related to virtual currency and the tokenization of real-world assets. Member units that violate regulatory policies and industry self-discipline rules are to be disciplined in accordance with relevant self-regulatory management regulations. By leveraging various industry infrastructure, conduct risk monitoring related to virtual currency, the tokenization of real-world assets, and promptly transfer issue clues to relevant departments.
（XIII） Without the approval of relevant departments in accordance with the law and regulations, domestic entities and foreign entities controlled by them may not issue virtual currency overseas.
（XIV） Domestic entities engaging directly or indirectly in overseas external debt-based tokenization of real-world assets, or conducting asset securitization activities abroad based on domestic ownership rights, income rights, etc. (hereinafter referred to as domestic equity), should be strictly regulated in accordance with the principles of "same business, same risk, same rules." The National Development and Reform Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, and other relevant departments regulate it according to their respective responsibilities. For other forms of overseas real-world asset tokenization activities based on domestic equity by domestic entities, the China Securities Regulatory Commission, together with relevant departments, supervise according to their division of responsibilities. Without the consent and filing of relevant departments, no unit or individual may engage in the above-mentioned business.
(15) Overseas subsidiaries and branches of domestic financial institutions providing Real World Asset Tokenization-related services overseas shall do so legally and prudently. They shall have professional personnel and systems in place to effectively mitigate business risks, strictly implement customer onboarding, suitability management, anti-money laundering requirements, and incorporate them into the domestic financial institutions' compliance and risk management system. Intermediaries and information technology service providers offering Real World Asset Tokenization services abroad based on domestic equity or conducting Real World Asset Tokenization business in the form of overseas debt for domestic entities directly or indirectly venturing abroad must strictly comply with relevant laws and regulations. They should establish and improve relevant compliance and internal control systems in accordance with relevant normative requirements, strengthen business and risk control, and report the business developments to the relevant regulatory authorities for approval or filing.
(16) Strengthen organizational leadership and overall coordination. All departments and regions should attach great importance to the prevention of risks related to virtual currencies and Real World Asset Tokenization, strengthen organizational leadership, clarify work responsibilities, form a long-term effective working mechanism with centralized coordination, local implementation, and shared responsibilities, maintain high pressure, dynamically monitor risks, effectively prevent and mitigate risks in an orderly and efficient manner, legally protect the property security of the people, and make every effort to maintain economic and financial order and social stability.
(17) Widely carry out publicity and education. All departments, regions, and industry associations should make full use of various media and other communication channels to disseminate information through legal and policy interpretation, analysis of typical cases, and education on investment risks, etc. They should promote the illegality and harm of virtual currencies and Real World Asset Tokenization-related businesses and their manifestations, fully alert to potential risks and hidden dangers, and enhance public awareness and identification capabilities for risk prevention.
(18) Engaging in illegal financial activities related to virtual currencies and Real World Asset Tokenization in violation of this notice, as well as providing services for virtual currencies and Real World Asset Tokenization-related businesses, shall be punished in accordance with relevant regulations. If it constitutes a crime, criminal liability shall be pursued according to the law. For domestic entities and individuals who knowingly or should have known that overseas entities illegally provided virtual currency or Real World Asset Tokenization-related services to domestic entities and still assisted them, relevant responsibilities shall be pursued according to the law. If it constitutes a crime, criminal liability shall be pursued according to the law.
(19) If any unit or individual invests in virtual currencies, Real World Asset Tokens, and related financial products against public order and good customs, the relevant civil legal actions shall be invalid, and any resulting losses shall be borne by them. If there are suspicions of disrupting financial order and jeopardizing financial security, the relevant departments shall deal with them according to the law.
This notice shall enter into force upon the date of its issuance. The People's Bank of China and ten other departments' "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading Speculation" (Yinfa [2021] No. 237) is hereby repealed.
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