Chinese authorities are reportedly going to impose further restrictions on bitcoin and other digital currencies, following a recent ban on initial coin offerings.

The government of China wants to strengthen control over digital currencies after financial regulators banned all initial coin offerings (ICO) in the country.

On Monday, the People’s Bank of China announced that all ICOs in the country are illegal and added that it will punish all fundraising activities in the future. Besides, it claimed that companies currently running crowdsales must return the funds to investors.

According to a report by Reuters, which cited financial news website Yicai, the recent ICO ban is just the beginning of the government’s strategy to tighten the regulation of virtual currencies and token sales.

Totally, $2.32 billion has been raised via ICOs worldwide, with $2.16 billion of that amount being raised since the start of the year, according to digital currency analysis website Cryptocompare.

Despite a record-breaking run last month, the price of bitcoin demonstrated a sharp decline shortly after the news was revealed. The digital currency dropped to $4300 on Monday, before falling further to $4,000. On some Chinese exchanges, the value of bitcoin decreased to as low as $3,400. The decline comes just three days after it reached an all-time high of almost $5,000.

Still, bitcoin has recovered then and is currently worth $4379, according to CoinMarketCap.

The crackdown has also affected the price of bitcoin’s main competitor, ethereum, which decreased by almost 20% on the news. At press time, the virtual currency is trading at $306, as CoinMarketCap shows.

Main Chinese exchanges, including Huobi and BTCC, told Reuters that they already stopped ICOs and are now working on returning money to investors. While some complained about the new regulation, other welcomed new rules, saying they would improve the bitcoin ecosystem in the future.

This is not the government’s first attempt to tighten regulation of the crytocurrency sector. Earlier this year, the central bank conducted investigation of local exchanges, including BTCC, Huobi and OKCoin, to ensure they are not violating anti-money laundering rules.

China, however, is not the only country concerned about the exponential growth in the number of crowdsales. In July, the U.S. Securities and Exchange Commission (SEC) warned that some ICOs should be regulated like other securities. Similarly, the regulators in Canada and Singapore issued warnings that tokens offered via ICOs may be classified as securities.

Another country that has recently unveiled plans to strengthen bitcoin regulation is South Korea. The country’s central bank, along with financial regulators and cryptocurrency companies, has recently conducted a meeting to discuss the possible strengthening of bitcoin regulation. Besides, he authorities are reportedly planning to punish startups raising funds via ICOs.

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