BY CNA team - November 5, 2018
PBOC may crackdown on airdrops
Airdrops, or the distribution of free tokens, may be the next target of Chinese regulatory authorities as they move to protect investors and maintain financial stability.
The People’s Bank of China (PBOC), in the financial stability report for 2018, says initial coin offerings (ICOs) disguised as airdrops continues to grow despite a ban on ICOs from September 2017 and the renewed clampdown in recent months.
It noted that a number of firms that have moved their projects outside of China are using agents to invest on behalf of in-country investors.
The PBOC adds that instead of crowdfunding through ICOs, free tokens are being given away while a portion is kept by the firm, which then profit through speculation in the secondary markets.
According to the central bank’s data, there have been 65 completed ICOs up until July 18, 2017, with only five completed prior to that year.
The PBOC data also revealed that over 105,000 people have participated in such crowdfunding, investing some US$377.3mil or more than 20% of the sum raised in the same period.
China has renewed a clampdown on cryptocurrency trading and ICOs in recent months, even moving against chat groups of messaging services that promote such activities.