Update | How agents are helping investors buy into initial coin offerings, despite their ban in China
‘Where there’s demand, there will be supply … If there are gains to be made, then people will take risks,’ says vice-president of the Hong Kong Blockchain Society, of the enduring appeal of cryptocurrency offerings
Initial coin offerings (ICOs) may well have been banned in China since September last year – but the opportunity of getting involved in these virtual fund-raisings, using “cryptocurrencies”, has far from disappeared altogether.
Before the ban, ICOs were marketed across China using online platforms. But all those sites were closed nationally by The People’s Bank of China (PBOC), the country’s central bank, with operators ordered to return money to investors.
The PBOC has since claimed in a report that a staggering 90 per cent of the ICOs launched in the country were fraudulent.
Its biggest fear was social unrest arising from an ICO proving to be nothing more than a fraudulent way of raising cash from unsuspecting investors.
China’s monetary authorities were also acutely aware of virtual currencies and coin offers being used by corrupt officials to transfer money out of the country.