Bitcoin tumbled the most since July after China’s central bank said initial coin offerings are illegal and asked all related fundraising activity to be halted immediately, issuing the strongest regulatory challenge so far to the burgeoning marketplace for digital token sales.

The People’s Bank of China said on its website Monday that it had completed investigations into ICOs, and will strictly punish offerings in the future while penalizing legal violations in ones already completed. The regulator said that those who have already raised fund must provide refunds, though it didn’t specify how the money would be paid back to investors.

It also said digital token financing and trading platforms are prohibited from doing conversions of coins with fiat currencies. Digital tokens can’t be used as currency on the market and banks are forbidden from offering services to initial coin offerings.

” This is somewhat in step with, maybe not to the same scope, what we’re starting to see in other jurisdictions — the short story is we are all familiar with regulations are coming ,” said Jehan Chu, managing partner at Kenetic Capital Ltd. in Hong Kong, which invests in and advises on token marketings.” China, due to its sizing and as one of the most speculative IPO markets, needed to take a firmer act .”

Bitcoin tumbled as much as 11.4 percentage, the most since July, to $4,326.75. The ethereum cryptocurrency was down more than 16 percentage Monday, according to data from Coindesk.

Read more: The Chinese ICO crackdown — a Gadfly editorial

ICOs are digital token sales that have insured unchecked growth over the past time, raising $1.6 billion. They have been deemed a threat to China’s financial market stability as authorities struggle to tamed financing channels that sprawl beyond the traditional banking system. Widely be considered to be a behavior to sidestep venture capital funds and investment banks, they have also increasingly captured the attention of central bank that see in the fledgling trend a threat to their reign.

The vast amount of money amassed in a short span of hour has furthermore attracted cyber offenders, with an estimated 10 percent of fund intended for ICOs looted away by swindles such as phishing this year, according to Chainalysis, a New York-based firm that analyzes transactions and provides anti-money laundering software.

Chu of Kenetic Capital said he believes China will likely eventually allow token sales, but only on approved platforms, and may even vet projects individually.

” I think they will allow sales of tokens in a format which they deem safe and more measured ,” he said.