The Beijing Internet Finance Industry Association (BIFIA), a self-regulatory body focused on digital finance, has issued a new warning Tuesday on security token offerings (STOs), saying STOs fund-raising is an illegal activity and STO projects should end relevant activities immediately.

The association said in a statement that some institutions and individuals still engage in STO-related promotion, training, and fund-raising activities , despite vigorous attempts to crack down on cryptocurreny issuance in the country.

The BIFIA went on to warn that STO promoters and issuers must strictly comply with China’s relevant laws and regulations and stop such initiatives immediately because STO fundraising is currently illegal in Beijing.

“Institutions and individuals suspected of violating laws will face punishment— including evicting them from the city, a shutdown of their websites and mobile apps  or the suspension of business licenses.” The association added.

An STO is similar to an initial coin offering(ICO), where a company is able to raise funds by selling digital tokens to the public. However, what makes the STO different is that it is backed by real assets such as shares, bonds or real estate, and allows token holders to share in the profits of the company. The STO is widely recognized as a safer and more legitimate way to secure funding than the ICO.

At present , the stance on STOs varies from country to country. American financial regulators like SEC seems to be open to such offerings because security tokens meet the securities law definition of a “security” in the US. But in China, any institution or individual is barred from arbitrarily issuing securities without the approval of the government. Therefore, ICOs or disguised ICOs in the country are illegal.

The BIFIA’s warning comes several days after Huo Xuewen, head of the Beijing Financial Supervision Authority,declared STOs illegal and told STO issuers not to do it in Beijing. His advise is to only engage in such activities when the government has authorized them.

The BIFIA also reminded investors to increase awareness of potential risks and not to fall victims to unauthorized and illegal financial activities. Moreover, the public is encouraged to report on potential violations.

Chinese authorities have escalated crackdown on cryptocurrency tradings and token fundraising since September 2017. The People’s Bank of China(PBoC), the country’s central bank banned ICOs outright and shut down domestic crypto exchanges. Last month, the PBoC extended its regulatory scrutiny to free distribution of crypto tokens called airdrops. Now, STOs are on the financial regulator’s radar.