Chinese regulators have launched a crackdown on individuals and firms raising funds by offering their own digital currencies.
The People's Bank of China has declared initial coin offerings (ICOs) illegal and wants them to "cease immediately".
A growing number of tech companies are opting to sell digital "tokens" because they are quick, easy and unregulated.
The ban saw sharp falls in the two leading crypto-currencies, with bitcoin tumbling $200 on Monday.
Issuing ICOs - a relatively new phenomenon - has become hugely popular in China, with close to $395m (£305m) raised from investors this year, according to data from Chinese state news agency Xinhua.
But it is part of a growing global trend. The research site CoinDesk suggests more than $1.5bn in capital has been raised through ICOs since the start of the year.That's up $256m from last year.
But in the new regulation, Chinese authorities have called on individuals and organisations to refund investors for any funds raised through ICOs.
The move is aimed at protecting investors and "dealing with the risks properly", said a joint statement from the People's Bank Of China, securities and banking regulators and other government departments issued on Monday.
China's latest ban is not the first time that regulators have attempted to crack down on crypto-currencies.
In January, the central bank warned several digital currency exchanges they would be shut down if they violated anti-money laundering rules.
Regulators around the world are in the midst of working out how to address some of the risks around ICOs.
The US Securities and Exchange Commission warned in July that some ICOs should be regulated like other stocks. Singapore and Canada have issued similar warnings.