Chinese authorities have warned local investors about the risks associated with investing in crypto projects disguised themselves as blockchain innovations.
At the same time, the regulator encourages investment in the technology area. The corresponding announcement was published on the official website of the Weihai Administration in Shandong Province.
The regulator drew investors’ attention to the increase in the number of illegal crypto projects. Also, experts recorded an increase in the issue of unregistered tokens and trading volume. Commentators drew attention to the resourcefulness of Chinese scammers who disguise illegal projects under the technology promoted in the country.
In 2017, China introduced a series of regulatory bans on crypto trading and ICOs. At the same time, according to a recent statement by President Xi Jinping, a country chosen the blockchain course. Technology should solve many of China’s problems. At the same time, the popularity of blockchain in the country is exaggerated.
“As the country promotes blockchain ideas, cryptocurrency ads are coming to the market. Many initiatives, as well as related illegal operations, are coming back to life, ”the Weihai authorities state.
Against the backdrop of disappointing statistics, the Chinese regulator intends to initiate inspections on ICOs and crypto startups. Recall that earlier local miners faced inspection raids. Many commentators concluded that regulatory problems can only be avoided from outside the country.
“Some companies install servers outside of China and promote their products among Chinese investors on social networks,” the report said.
Many projects attract investors by buying ads from show business stars. A number of companies are simultaneously manipulating digital asset prices and cash withdrawal limits. Many illegal projects are pyramids.
China’s Pathway To Blockchain
At the end of October 2019, Chinese President Xi Jinping announced the country’s choice of a blockchain course. Technology, as conceived by the Chinese leaders, should become the basis for the development and improvement of many areas.
The next day, regulators approved a crypto law. Later, information appeared in the media about the regulatory body for the certification of blockchain products. A technology committee has also been formed in the country.
Despite the active promotion of the blockchain, the real level of popularity of technology in China is greatly exaggerated. Note, the regulatory authorities of China are attracting relevant organizations to the development of the blockchain.
The work is carried out against the background of preparations for the launch of the Chinese national cryptocurrency. According to the latest data, a digital asset will be launched within a year. The popular companies of China – Wechat, and Alipay can attract the spread of crypto yuan.
Digital Yuan is a competitor of the Libra crypto project from Facebook. According to Mark Zuckerberg, CEO of the social network, if China is the first to release a digital asset, the country will get an audience of 1.7 billion potential users. China does not hide its intentions to get ahead of Libra.