The Chinese central bank, The People’s Bank of China, have labelled Security Token Offerings (STOs) as illegal, according to a report in the South China Morning Post.

The deputy governor of China’s central bank, Pan Gongsheng, reportedly said that “illegal financing activities through STOs and ICOs [Initial Coin Offerings] were still rampant in the mainland despite a nationwide clean-up of the cryptocurrency market last year.”

Gongsheng went on to say that if the Chinese government hadn’t stepped in, the cryptocurrency market could have damaged the general financial stability in China.

He added: “The STO business that has surfaced recently is still essentially an illegal financial activity in China. Virtual money has become an accomplice to all kinds of illegal and criminal activities.”

The report also quotes Gongsheng as saying that “most of the financing operations conducted through ICOs in China were suspected of being illegal fundraising, pyramid sales schemes, and other financial fraud.”

The chief of the Bureau of Financial Work, Huo Xuewen, gave a stern warning to those looking to launch STOs in Beijing, stating: “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.”