Nov 5, 2018 06:41 UTC
Nov 5, 2018 at 06:45 UTC
Report by PBoC Reveals Efforts to Ban Airdrops in China
China’s central bank, the People’s Bank of China, has revealed in a recent report that it is looking to ban the free distributions of tokens, in other words airdrops. The financial stability report by the central bank was released on Friday.
As per the report, PBoC has stated that the number of airdrops disguised in the form of Initial Coin Offerings has increased despite the efforts to clamp down on the crowdsales. The report added that many ICO projects are taking their firm to other countries and consequently using agents to invest on behalf of the investors in China.
The People’s Bank of China further noted that many projects are not issuing coins to the public in a direct manner, but are rather using airdrops to give away free tokens and reserving a percentage of the total token supply. The projects then use price speculation to increase the price of their tokens and hence make profits.
The report quoted the statistics which showed that till July 18, 2018 there were as much as 65 completed token sales in China, 5 of these were completed even before 2017. PBoC added that as much as 105,000 investors took part in the tokensale. This amounted to a total funding of USD 377.3 million, which is 20 percent of the sums raised globally through ICOs in the same time window.
In the light of the matter, the central bank concluded the report by saying that in order to monitor the crypto market and for the purpose of protecting the investors, it needs to coordinate with other agencies for holistic monitoring.
Since September 2017, the central bank of China has been actively monitoring the crypto industry as a measure to ban tokensales. In fact, it has outright banned ICOs. In June 2018, the PBoC made a statement saying that crypto asset trading is illegal in the world’s second largest economy. Consequently, in August, China’s National Internet Finance Association categorized tokensales on its platform for the purpose of facilitating the reporting of illegal ICOs in the country.