Chinese Firm Raised $18M, Possibly Violated ICO Ban

China ICO

Despite China’s restriction on ICO’s in 2017, a Chinese healthcare company has reportedly amassed $18M b distributing a custom token.

Hangzhou-based Zhaoyun Group, according to Investor China, a firm which engages in healthcare and scientific research was implicated. Social media posts signified that the firm ran a token sales on April 8.

The posts indicated that the company tried to issue 170 million Trillion Cloud Gold (TGCG), its own ERC-20-based token, and the company sold 10 percent of it in a public offering.

Ethereum blockchain transactions tracked by etherscan.io revealed token created in mid-March 2018 but no activity after.

The report indicated the $18M was raised in a public offering through a multilevel distribution system which gives incentives to customers referring additional investors to buy the token.

The company’s activities were “questionable” considering it may have breached the country’s ICO prohibition. The company’s business methods resemble pyramid and Ponzi schemes, the report added.

The alleged ICO was reported when the Chinese government has tightened its restrictions against crypto-related fundraising activities, as well as Ponzi schemes which defraud investors, Coindesk reported.

Related Cryptocurrency News