The People’s Bank of China (PBoC), the central of the country has broadend its probe to include token airdrops, which it termed as “disguised” Initial Coin Offerings (ICOs) in its financial stability report of 2018, published on November 2.
Speaking on familier terms, the report recapitulates the bank’s strict stance of anti-ICO and crypto trading, outling the former as “illegal” fundraising and highliting the widespread risk of fraud and pyramid schemes associated with the industry.
Pointing to a new area of focus the new report tries to warn that “airdrops” are jumping regulations around the token sale model to public by assests to investors at free of cost. As per the it, airdrops are reserving tokens and then capitalizing on the market behaviour inflating the value of the assest to earn profit.
Through the warning bank says that, the number of such schemes are in rising and despite strong attempts to carck down the token issuence in the country, and calls for “early detection” and redoubled watch by the regulators, refering to the need of international partnership to better protect the intrests of the investors.
Further the document asserts the concerns about crypto comapnies moving overseas and using foreign “agents” to invest on behalf of the domestic clients in mainland China, as well as warning against pseudo whitepapers and ICOs using the term “blockchain innovation.”
It also refers to the suspision surrounding the market speculation and violation of anti-money laundering (AML) regulations in cryptocurrency sector, mentioning the cons of this practice.
As per the bank, till July 18, 2017, before ICO ban of China took affect, 65 ICOs were completed in the country, out of those only 5 launched prior to 2017. During this period, the total number of participatants in ICOs exceeded 105,000 with estimated funding coming around 2.6 billion yuan (around $375.4 million). Which according to PBoC, accounted for nearly 20% of ICO finacing totally.