Xunlei, the NASDAQ-listed cloud network provider, has launched its proprietary blockchain platform, despite ongoing class actions over an alleged initial coin offering (ICO).
At a press event in Beijing on Friday, the company announced its open blockchain platform dubbed "ThunderChain," which is designed to enable developers to build decentralization applications.
Based on the practical Byzantine fault tolerance (PBFT) consensus mechanism, Xunlei makes the significant claim for ThunderChain that it provides processing capacity in the millions of transactions per second.
Xunlei explains that the platform combines its proprietary blockchain with its existing capacity in cloud-based content delivery hosted on a peer-to-peer distributed network.
Founded in 2003, the firm became notable in China for its early development of a peer-to-peer download app called Thunder, which makes use of internet users' idle broadband capacity to expedite downloads and uploads of digital content.
While branding ThunderChain as a new product launch, Xunlei told CoinDesk that it is, in fact, built upon an existing blockchain platform that it has been using to generate its custom token, LinkToken, since October 2017.
As reported by CoinDesk, the firm first announced its move into the blockchain space in October last year. At the time, users could obtain LinkTokens by purchasing Xunlei's then-new cloud storage device – called the OneThing Cloud – to share their spare broadband bandwidth.
The announcement initially caused the company's stock price to skyrocket from $4 to over $20 in November of last year, but it dropped again to around $10 in January following a Chinese financial self-regulator's accusation that the product launch was, in effect, an "initial miner offering."
The agency, China's National Internet Finance Association, issued a statement in January, warning residents over activities that require users to purchase hardware in order to participate in a token-generation process and have the substance of an ICO – a fundraising method explicitly banned by the Chinese authorities.
As a result, Xunlei investors formed two class action lawsuits against the firm, alleging it knowingly conducting an unlawful and disguised ICO.
However, in response to CoinDesk and comments seen on various media outlets, Xunlei has, on several occasions, firmly denied the accusations.
"We have been very straight on our business practices – we do not sell tokens," Chen Lei, CEO of Xunlei and a defendant in the two lawsuits, told the South China Morning Post earlier this month.
Chen Lei at event via Xunlei