At present, Chinas domestic virtual currency trading platforms lack the relevant legal license, which leads to the virtual currency trading platforms free from the existing regulatory system. In fact, there is a huge business risk.
Of course, this is correct and the big reason why they have this reasons is the fact that the government choose to ignore the cryptocurrency market because they are thinking that what they can not control should not be allowed to flourish in China. They can put up the needed regulations if they want but they choose the easier path which is banning ICOs and Bitcoin exchanges...something which many of their citizens have no choice but to follow as their government does not enjoy hearing dissenting opinions on the matter. There is no legal basis because they never provided one.
It is, of course, unfortunate that Bitcoin and cryptocurrency has no place in the government of China as they are control freak and generally don't believe in giving their citizens the freedom to choose. Anyway, I am sure that soon there will be a pressure for the government to open up the cryptocurrency market in exchange for strict regulations and procedures. The ban can just be temporary until they can come up with acceptable solutions on the many concerns expressed by the government in connection with this platform.
We have to remember that from now on...with or without China the Bitcoin journey can go on!