China wants to ban airdrops to stop smuggling ICOs through the backdoor
|- PBoC tightens approach towardscryptocurrency industry.
- 20% of the total amount raised globally before July 18, 2017, came from China.
The People's Bank of China (PBoC), the country's central bank, is looking to clamp down on airdrops – free distributions of crypto tokens.
Chinese authorities consider new tightening measures against cryptocurrency trading indystry. Namely, the People's Bank of China (PBoC), grew suspicious about free distributions of crypto tokens know as airdrops. According to the report published by the Chinese regulator on Friday, airdrops are "disguised" initial coin offerings (ICOs) used to distribute tokens in China despite the existing ban.
Moreover, the central bank believes that projects give away a part of the total toke issuance and use speculative tactics to pump up the price for its token on the secondary market and reap profits by disposing the reserved part of the tokens.
According to the PBoC's statistics, 65 ICOs were completed in China before July 18, 2017, while over 105,000 people participated in the crowdfunding and invested about $377.3 million, which accounted for about 20% of the total amount raised globally during the same period.
The Chinese central bank is worried that companies tend to move outside China and then allow Chinese investors to participate in ICOs via agents. The regulator urges other agencies to adopt a coordinated approach towards ICOs and cryptocurrencies in order to monitor the industry and protect investors.
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