Xinhua News Agency: ICO put on the ocean shell and bypassed the regulation as the chain chaining of leek.

Xinhua News Agency: ICO put on the ocean shell and bypassed the regulation as the chain chaining of leek.

Xinhua News Agency, Tianjin, September 26

Xinhua News Agency reporter Mao Zhenhua

Recently, the Shanghai headquarters of the People's Bank of China issued an article on its official website, saying it will continue to guard against ICO (first token issue) and virtual currency trading risks. In the past year, the central bank and other departments have joined hands to crack down on the speculation of illegal public financing by ICOs. The prices of virtual currencies have fallen sharply and the regulatory effect has been remarkable. However, a recent survey by reporters found that there are still some ICO projects under the banner of foreign foundations, put on "foreign shell" to circumvent supervision, or put on block chains and other "waistcoat" to deceive investors, circle money financing "leek cutting".

The opening of the OTC transaction has helped fuel the media.

Since last September, the regulatory authorities' sustained efforts to crack down on the illegal financing of ICO have achieved remarkable results. On the one hand, the domestic virtual currency trading platform and currency issuing platform were basically shut down and shielded, and the prices of the main virtual currencies generally dropped more than 70% from the highest point; on the other hand, the direct exchange of RMB and virtual currencies was stopped, and the main source of funds for ICO speculation was cut off.

Nevertheless, recent press survey found that it is still not difficult to purchase ICO token in Renminbi.

At present, the purchase of mainstream virtual currency depends on OTC. Login OTCBTC, CoinCola and other platforms can be seen, the platform has an OTC trading area, through Alipay, WeChat or bank transfer, you can easily purchase bitcoin, TEDA currency and other mainstream virtual currency. Then enter the currency coin trading area, you can purchase any ICO token.

An industry insider revealed that the so-called over-the-counter trade is similar to Taobao shopping, matching buyers and sellers to complete the transaction between the RMB and the virtual currency. "It seems that the whole process platform does not violate the relevant policies, but the over-the-counter transactions in fact opened up an opening for the ICO token transaction." The source said.

In addition to over-the-counter transactions, money speculation under the banner of block chains is also very active from the media, compared with last September 4, the central bank issued a joint seven ministries and commissions "on the prevention of token issuance financing risk announcement" before. They even joined hands with trading platform and ICO project partners to play the role of combine harvester.

According to industry sources, these self-Media publications, in addition to advertising projects, also undertake soft writing, project interviews, offline salons, etc., played a role in promoting the ICO. Some of them offer $100,000 or at least one bitcoin from the media, while others charge $1,000 per minute for a video interview.

The platform moves overseas, and the process of making money is more hidden.

Reporters found that after tightening supervision, some of the original domestic virtual currency trading platforms seem to be shut down, but in fact, they have "gone to sea" and transferred to overseas registration, and continue to provide trading services to domestic users.

For example, some platforms have gone to Malta to register; some platforms have homepages in full English, but they actually offer Chinese pages; others have set up groups on the Telegram, an instant messaging tool, to avoid supervision, to facilitate the networking of "believers".

Although the regulatory authorities have taken network shielding measures against the "sea" trading platform, it is not difficult to log in by purchasing VPN (virtual private network) to "turn over the wall".

In addition to the trading platform, the project side also began to "go to sea" for "circuitous development", the process of currency issuance is more hidden. The reporter once met an ICO project leader at a business incubation base in Haidian District of Beijing. He described the "new ecology" of ICO coinage issuance.

To avoid regulation, a foundation was first set up in foreign countries to issue ICO tokens. The fund-raising is still mainly for domestic investors. The project white paper can be purchased on "Taobao", the price is up to 40 thousand yuan. When it comes to external publicity, the core team in the white paper is basically foreign faces, usually paid to "cover up" and the person behind it seldom shows up.

The "sea going" project will be jointly promoted with the trading platform. Industry Research Institute block rhythm statistics in the first half of this year in the currency, OKEx and other five domestic investors most commonly used trading platform projects found that five trading platforms a total of 337 yuan, excluding a total of 264 coins duplicate. This is roughly equivalent to the 264 ICO tokens issued at home and abroad.

But the fact is that in the 3 and April of this year, the ICO token broke down in large areas. By the August 21st market price, the breakage rate of the 264 upper currency items was 98.8%.

Implementing precision strike to prevent accidental injury of block chain

Reporters interviewed learned that the ICO project broke, making some investors lose their blood. Liu Peng, an investor in Tianjin, told reporters that he started investing in virtual money online from the beginning, until September 4 last year, when the server was transferred overseas but mainly for domestic trading platforms, the initial investment of 80,000 yuan is now less than 20,000 yuan.

As far as he knows, some people even make loans and borrow money to fry coins. After two times of "waist chopping", they lose less than 90% of the losses.

In the face of the resurgence of virtual currency speculation, the industry calls for further regulation.

Li Honghan, a researcher at the Institute of International Monetary Studies at Renmin University of China, believes that some self-Media publicity exists to mislead investors and even cooperate with the project side to make huge profits by using stock market manipulation. The person in charge of the Beijing Financial Bureau said that the media involved in ICO speculation should be shut down in time.

In view of the trading platform and the project side "going to sea" to evade supervision, experts pointed out that ICO supervision must adhere to international cooperation to form a joint regulatory effort.

At present, many ICOs issue coins under the banner of block chain technology, but the two can not simply draw an equal sign. Xu Zewei, Secretary of the Party Committee of the Beijing Internet Finance Industry Association, said that in the context of the ban on ICO, there are indeed some companies claiming to be using block chains to "sell dog meat by hanging sheep's head" and "cut leeks" by wrapping up worthless tokens in concepts.

Guo Yuhang, director of China Block Chain Applied Research Center, said that to distinguish Block Chain Technology from Virtual Currency Hype and promote it to solve practical problems, it is undoubtedly compliance and potential to develop non-currency Block Chain Project.


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