After the ban of the initial coin offerings (ICOs) imposed by the Chinese government, the investors from this country are participating in ICOs outside of China by using agents from abroad, who they contact using WeChat, an instant messaging application.
This information was reported yesterday by The South China Morning Post, a local news outlet. According to its sources, these agents from abroad act as intermediaries and charge a high commission for their brokerage services.
An Hui Tian Ce Blockchain is one of the notable agencies among this type of intermediaries. The agency charges a 10% commission of the investments made in the ICOs and also requests the money to be paid in advance. This agency only accepts Ethereum as a method of payment and currently offers a list of eight ICO campaigns to its clients, among which are Dfinity, RightMesh and Wireline.
RightMesh is an investment platform based on the blockchain technology and one spokesman of the company sent an email to The South China Morning Post saying the Canadian startup was not looking for investors in China and denied any relation with the agency An Hui Tian Ce Blockchain. Nevertheless, it is unknown if this is the case with the rest of the ICOs offered by the intermerdiary agency through WeChat.
The promotion of ICOs through WeChat is against the Chinese laws, according to Cao Ming Xiu, the operations officer at Dragonsocial. Dragonsocial is a marketing company from Hong Kong specialized in connecting the foreign ICOs with the Chinese investors. According to Cao Ming Xiu, the company is not using WeChat to promote ICOs, but to discuss the project they are offering: “Lots of companies launched ICOs last year, when there were a limited number of investors. We thought it was high time to provide them with a service. There were many cases in China where people posted adverts with big WeChat groups. But that goes against Chinese regulations, and we don’t do that. Rather, what we do is community-building. We don’t promote our clients and their ICOs in groups, instead, we discuss them.”
According to Cao Ming Xiu, there are more than 20,000 WeChat groups where the ICO projects are discussed. At the moment, the number of agencies promoting ICOs through instant messaging apps such as WeChat in China is unknown, as well as the number of ICO projects offered through this app. Moreover, the total amount of money raised this way also remains unknown.
The People’s Bank of China (PBC), the Chinese central bank, prohibited the organization of ICO campaigns in the country last September. Moreover, the Chinese authorities banned all ads on internet related to the initial coin offerings in February this year.
