Chinese crypto companies head overseas to escape ICO ban: Report
Chinese ICO platforms are evading the ICO ban in the country, says a report published by the Xinhua news agency. The report explained that all the ICO’s followed ‘go to the sea’ approach to successfully launch an ICO and set up a company. The report also indicated the role of ‘self-media public companies’ in advertising and promoting these projects within China.
Packing bags to go overseas
The report found that after the ICO ban became stringent some domestic cryptocurrency companies shut down. However, this was just to escape the eyes of the law. These companies actually sought refuge overseas and registered themselves as foreign companies. Some platforms flew to Malta, a crypto haven, for registration. The report noted that although their website homepages are in English some of the companies did provide web pages in Chinese. Also, some companies set up Telegram groups to coordinate with their domestic Chinese customers.
The Chinese regulatory authorities have a system in place to shield Chinese ICOs however, anybody can purchase a VPN (Virtual Private Network) to bypass these measures. An ICO project leader explained how ‘going to the sea’ worked for Chinese ICOs. He said, “In order to evade supervision, a foundation was set up abroad to issue ICO tokens. The fundraising is still mainly for domestic investors. The project white paper can be purchased on “Taobao” and the price is around RMB 40,000. The core team in the white paper is usually represented by a foreign face, usually paid for “filling the facade”, and the person in charge behind it rarely shows up.”
Earlier this month the Chinese govt issued a warning that reminded the citizens of the risks of ICOs. This indicates that the country’s predicaments about ICOs have not changed since the ban in September 2017. The notice explained that the “unauthorized” and “illegal” ICO financing model caused a serious disruption” to the “economic, financial and social order”.
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