Chinese Regulators Issue Joint Warning On Fake Crypto Fundraisingbr>
Chinese regulators have warned citizens about illegal fundraising attempts claiming affiliation with the blockchain industry.
In a joint statement, the Banking Regulatory Commission, the People’s Bank of China, the Ministry of Public Security, the State Administration for Market Regulation, and the Central Cyberspace Affairs Commission warn of “lawless entities” seeking to raise funds “using the banner of financial innovation and blockchain” in exchange for crypto assets. The regulators urge Chinese citizens to be “rational” about blockchain-related information and increase their awareness of risks.
“Such activities are not really based on blockchain technology, but rather the practice of speculative blockchain concepts for illegal fundraising, pyramid schemes, and fraud,” the regulators said.
According to the statement, some of these companies set up websites by renting overseas servers, target domestic residents and conduct illegal activities by remote control.
“Some of these projects tap celebrities and airdrop ‘candies’ as ways for promotion and solicitation,” the regulators said. “In fact, they manipulate the prices of such cryptocurrencies to make profits illegally. Some individuals in chat groups claim they have obtained investment quotas for premium overseas blockchain investment projects. It could be an investment or could be fraudulent. These illegal activity funds mostly flow overseas; it’s very hard to regulate and track.”
The regulators also warned Chinese residents against other fundraising methods such as “initial exchange offerings,” “initial fork offerings” and “initial miner offerings.”
The statement comes just days after authorities in Beijing banned shopping malls, hotels, restaurants, and office buildings from hosting events that promote cryptocurrencies. The news also follows recent reports that the China National FinTech Risk Rectification Office was seeking to block access to 124 crypto trading platforms with overseas IP addresses.