Chinese Regulator Calls AirDrops Of Tokens “Disguised” ICOs
As a follow-up to the tough policy, aimed at banning digital currencies and ICOs in the country, the Central bank of China is looking to prohibit AirDrops of tokens.
According to the state’s report on financial stability for 2018, the number of so-called disguised ICOs continues to grow. The Chinese authorities also include AirDrop, free distribution of tokens to all potential investors who expressed interest in the project, to this list.
Such startups do not use tokensales directly to make money. Instead, they give away part of the coins to expand the loyal audience and popularize the new cryptocurrency, not listed on crypto exchanges yet. The project retains the other part of the emission and, according to the Chinese regulators, can speculate on the price of these tokens in the secondary market.
The report states that 65 ICOs were conducted in China by the middle of 2017. Later that year, the authorities banned tokensales. However, more than 100 000 investors continued to invest in cryptocurrency and brought about $377 million to the industry. The central bank believes it is necessary to strengthen the supervision of the cryptosphere and involve other agencies to control the illegal digital currencies market.
Crypto trading has been banned by the Chinese central bank since September 2017. However, the regulators do not prohibit the possession and transfer of bitcoins between individuals. Recently, a local court has proposed to protect bitcoin under the property laws, recognizing the economic value of the cryptocurrency.