Reports for local agencies have alleged that a group of cryptocurrency investors in China are facilitating their ICO through middle ground agencies on WeChat.
According to the reports from South China Morning Post, many agencies are offering brokerage services for cryptocurrency investors to bypass the ban on ICO. Intermediaries are promoting their services via WeChat, a popular messaging app. These intermediaries are making a lot of money from these services.
Bypassing ICO Bans
An Hui Tian Ce, an agency that provides this service charges investors 10% of the total ICO investment made via its services. The clients are required to make all payments using Ethereum.
A marketing firm based in Hong Kong, Dragonsocial, has devoted time and effort to creating a cryptocurrency community on WeChat. The firm’s goal is to assist in the promotion of token sales to investors in China.
Cao Ming Xiu, the operations officer at Dragonsocial, said: “Last year, many companies hosted ICOs, but there were limited investors. We felt its about time we provide ICOs with this service.”
In defense of the legitimacy of Dragonsocial, Cao Ming Xiu said: “Many people post adverts in big WeChat groups and this is against the regulations in China. Our company is different. We don’t advertise ICOs like this. We focus on community building. Also, we don’t promote our clients in groups. We make meaningful discussions about them instead.
Currently, over 20,000 WeChat groups are devoted to ICO discussions across China. Some groups have hundreds of active members, and a small percentage of these members are Dragonsocial employees who lead conversations in these groups.
Emil Chan, the vice president of the blockchain society in Hong Kong, said that enforcing the virtual currency ban in China will be challenging. In his words:
“There is no way a ban can stop unregulated dealers. The more you ban, the more they set up. As long as there is demand, there will be supply. People will always take risks.”