According to a recent report published by the investigating news agency from China shows that despite the government’s efforts to introduce ban on illegal ICO financing investors could circumvent the law by employing a foreign shell company, among different prospects.
Xinhua reports that once China’s crypto related laws became additionally strict, domestic virtual currency exchanges went overseas for registration — whereas showing to be closed within the country —but however, provided trading services to the native customers.
The agency specifically mentions Malta as a chief destination of selection, noting the existence of Chinese language versions of the currently Malta-based firms. Xinhua additionally mentioned the employment of electronic messaging groups to coordinate with domestic Chinese users.
The News agency while quoting the ‘Insider Source’ added:
“It appears that the current process doesn’t violate the relevant policies, however the over-the-counter dealings have truly opened a hole within the ICO token transaction.”
While authorities have tried to ban web access to the ICO’s within China, Xinhua states that almost all measures could be subverted by employing a Virtual Personal Network (VPN).
Xinhua additionally claims that there are “self-media public companies” that play a job in advertising and promoting ICO within the country.
China’s 1st outright ban of ICOs was enacted a year ago in 2017. Earlier this month, the People’s Bank of China revealed some new document on its official web site, stating that it’d still guard against ICO and cryptocurrency-related commercialism risks.