Crypto Frontline

How people manage to bypass the China ICO ban?

How people manage to bypass the China ICO ban?

How people manage to bypass the China ICO ban?
September 28
06:29 2018

China is most likely one of the countries with the most aggressive stance when it comes to cryptocurrencies, ICOs, and other digital assets. Recently, we have talked about China and its total crypto crackdown, where we have put in the spotlight some of the latest measures taken by the state in order to prohibit any type of digital assets. Chinese officials had been stating that ICOs are “illegal operations” and they acted accordingly by banning them.

Still, despite this negative bias from the government, people from China still manage to get involved in the industry, and ICOs are still taking place.

How does this happen?

Even though the government had prohibited the use of cryptocurrencies, technology can help people to avoid these measures. People can buy Bitcoin from an over-the-counter exchange platform and then use to purchase other tokens if they want. Alipay, WeChat, and bank transfers can be used as ways of transferring money, so a lot of options are on the table.

Secondly, in order to cover their tracks, people are using Virtual Private Networks (VPNs), so their activity on the web remains anonymous.

What about ICOs?

As bitcoinist.com had also stated, Chinese people can still create their own ICO projects by simply opening a company abroad. Malta is one of the most favored destinations for crypto enthusiasts, who want to get more involved in the industry and create their own business.

With a company registered abroad and with all the money being raised online, businesses can take care of themselves, without being disturbed by any government agency.

Risks involved also

Even though this might sound like a good news for the industry, it brings with it some negative implications. This methodology helps people to stay anonymous and create their own ICO projects, but it is also a tool used for purposes. The level of ICO scams is at an alarming rate, and an estimate of more than 70% of the tokens are now below their ICO value.

However, other countries like France, the United Kingdom, Japan, or The United States, are adopted a completely different approach and want to regulate digital assets, so that companies and people will conduct their activities in the blockchain industry under a regulatory framework and supervised by a financial agency. There are still more steps to take until we will get to that point, but at least in the western world, there seems to be will to implement blockchain-based companies in the economy.