After mainland China called Initial Coin Offerings illegal financial activity and banned fund-raising via digital currencies, the cryptocurrency market underwent a severe correction.

Within the last 24 hours, bitcoin fell 9% to $4,079, Ethereum dropped 13.41% to $286, Bitcoin Cash fell 15.67% to $493. Bitcoin demonstrated its daily minimum at 02.04 UTC on 5 September, touching $3,998.11.

According to CoinMarketCap, the rate of Ethereum, the second biggest cryptocurrency by capitalization, fell as low as $268.29, while the price of Bitcoin Cash went to $458.78.

Rates of all cryptocurrencies from CoinMarketCaps top-20 have moved to the red zone. The sharpest decline within the last 24 hours is demonstrated by IOTA (-25.09%), NEO (-23.03%) and Qtum (-28%).

The decline of tokens of Chinese-related platforms can be explained by investors' fears about the future of these projects in the light of the latest statements of the Chinese authorities.

Both NEO and Qtum conducted the ICO in 2017, and the Chinese regulator on 4 September called the ICO mechanism illegal and urged platforms that carried out ICOs to return the raised funds to investors.

The total capitalization of the cryptocurrency market shrank to $139 billion. The bitcoin share increased to 48.3%. Traders are transferring their assets from risky tokens to authorized funds and to the largest and most stable cryptocurrencies, such as bitcoin.

The growth is demonstrated only by a few number of cryptocurrencies, including the Tether token, tied to the dollar exchange rate. Tether increased to the fourth place by the 24-hours exchange volume with $427 million after bitcoin ($3.4 billion), Ethereum ($2.14 billion), Litecoin ($1.1 billion).

On 4 September, the Chinese authorities have called all Initial Coin Offerings (ICO) unauthorised fundraising tools and a possible scam and ruled to immediately stop all ICOs. The joint statement was issued by seven government administrations including the People's Bank of China, China Securities Regulatory Commission, China Banking Regulatory Commission and China Insurance Regulatory Commission. Following China's ban of all ICO projects, the South Korean press reported that the South Korean regulators also plan to punish ICO project due to violating national securities laws.