Chinese Investors Use Wechat Brokers to Bypass ICO Ban
Reports have alleged that many Chinese cryptocurrency investors are seeking middle-men agencies on Wechat to facilitate their transactions in order to bypass the nation's prohibitive virtual currency regulations and access exposure to initial coin offerings (ICOs).
ICO Token Brokerages Allow Chinese Investors to Bypass Ban
Said cryptocurrency middle-men are reported to be promoting their services via popular social messaging app Wechat, and are charging a significant premium for the service. One agency, An Hui Tian Ce Blockchain charges upward of ten percent on investments made in ICOs using its services. A representative of the agency indicated that clients make all payments in advance using Ethereum.
Dragonsocial, a Hong Kong-based marketing firm that specializes in assisting ICOs to promote their token sales to Chinese investors, has devoted resources to the development of what it describes as 'cryptocurrency communities' on Wechat.
ICO Brokerage Agencies Advertise on Wechat
Cao Ming Xiu defended the legitimacy of Dragonsocial's services, stating that 'There were many cases in China where people posted adverts with big WeChat groups. But that goes against Chinese regulations, and we don't do that. Rather, what we do is community-building. We don't promote our clients and their ICOs in groups, instead, we discuss them.”
Cao estimates that more than 20,000 Wechat groups devoted to the discussion of ICOs exist across mainland China. Dragonsocial's head of growth, Raymond Lam, stated 'Some groups have hundreds of people involved,' adding that 'A small percentage of them are our employees, and they lead conversations. It is through that, we help members discuss certain new projects.'
The Folly of Prohibition
'There is actually no way to ban all unregulated dealers, [If you ban one], they'll just set up another,” Chan said. 'Where there's demand, there will be supply. If there are gains to be made, then people will take risks.'
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