China Central Television (CCTV), the country’s highest-level government mouthpiece, has hit out at domestic initial coin offerings (ICOs) that it says are still “rampant,” despite a 2017 ban.
During its “Financial News” program aired on Monday night, the state media outlet said that the ICO ban issued by the People’s Bank of China last September had not deterred local investors. Instead, a get-rich-quick mentality is driving a rush into the cryptocurrency space.
CCTV went on to blast the emergence of what the Chinese crypto community calls “air coins” – a reference to token projects that are not backed by legally registered business entities – claiming that the number of air coins has increased by 30 times since the ICO crackdown.
“While many business entities have moved their projects overseas following the ICO ban, a lot of these ‘air coins’ carried on fundraising in China without migration because they are loosely organized as a temporary team, not even a formal business entity,” according to the program.
In order to appear to be legitimate, the report said, a typical technique used by such projects is to promote their associations with notable cryptocurrency investors, such as Li Xiaolai, an early bitcoin investor and evangelist in China.
“99.99 percent of the time, I’m being associate with these projects without even knowing it. There’s always this fear of missing out (FOMO) among investors. And when they can’t make judgments by themselves, they tend to refer to whoever influential is associated with the project,” Li was quoted as saying in the program.
The report marks the latest effort by Chinese state media to educate the public about what it considers cryptocurrency market chaos. It also comes at a time when law enforcement agencies in China are beefing up efforts to crack down on schemes that use token sales to raise capital from the public.
CCTV building image via Shutterstock