Chinese State Media Accuses ICOs and Exchanges of Defying Crackdown

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Voice of China, the Chinese state-owned media, in its latest reports has criticized the efforts by initial coin offerings (ICOs) and cryptocurrency exchanges in the country to continue operating despite the central government launching a crackdown in 2017.

In the reports, Voice of China indicated that late last year, seven commissions of the country’s Central Bank issued an alert on the risks that come with issuing coin offerings. The alert prohibited all institutions from engaging in interactions that involve tokens, legal currency and ‘virtual currency’.”

According to one of the reports, many companies are still active in the cryptocurrency sector and are taking advantage of the rising bitcoin prices. The report added that many cryptocurrency exchanges in China have set up websites in other countries are now offering digital currency to Chinese users under the disguise of foreign companies.

Voice of China Targets Okex

The report by Voice of China has particularly focused on Okex and has accused the company of using companies that do not exist to operate its operations in China. Additionally, the company has been accused of issuing unlicensed securities.

The report has indicated that following the ban, OKCoin moved all its data plus digital currency to the OKEx Exchange. OKEx Exchange was developed outside china. According to an Okex customer testimony quoted by Voice of China, the company is nominally relocating overseas and has claimed that it has its headquarters in Belize. However, the customer says the company has full operations in Beijing and almost all its users are from China.

The report by the state media has also accused ICOs for defying the directives issued by the central government. The report adds that the directive issued by several government agencies declared that the issuance of token is an illegal and unauthorized financing. The state media accused the ICOs of acting in violation of violating financial laws through by illegally issuing tokens, illegal fundraising, illegal distribution of securities, pyramid schemes, Financial fraud and other criminal and illegal activities.

The report makes special mention of Deng Jianpeng, who is professor at The Law School of the Central University for Nationalities who is said to have a lot of experience in studying and analyzing digital currencies. Mr. Jianpeng proposes that there should be a global, dynamic and flexible regulatory mechanism that encourages innovations.