Chinese Reserve Bank Targets Airdrops in Latest Crypto Crackdown

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Chinese Reserve Bank Targets Airdrops in Latest Crypto Crackdown

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The People’s Bank of China (PBoC) is taking another step to remove the footprint of cryptocurrencies in the country and is now clamping down on coin airdrops, which are free token giveaways commonly conducted by new projects.

According to the official financial stability report of 2018, the PBoC said that airdrops could be disguised initial coin offerings (ICOs) that continue to grow in number. The bank is reportedly frustrated because it has used its authority to ban ICOs but airdrop campaigns have not ceased.

The report shows clear frustration from PBoC regarding the token market because some crypto-related firms are moving overseas from China and using investor agents to secure funding from the country. According to the bank, some companies are also using airdrops to give away free tokens, before manipulating the market to increase the prices.

There were overall 65 ICOs that took place in China until 18 July 2017 and most of them took place in the same year. The September 2017 ban did stop ICOs mushrooming in the country but they are finding ways to sustain themselves. The PBoC remains adamant about controlling ICOs and their funding, and the official financial stability report suggests that it is coordinating with other national agencies for this purpose.

The China National Internet Finance Association (NIFA), a self-regulatory organization, came into the limelight back in August when it added a “token sale” section on its website so that the public can report illegal ICOs raising funds in the country.

In recent months, the government has softened its stance towards cryptocurrencies. A recent court decision allowed Chinese merchants to accept payment in Bitcoin. But ICOs and even airdrops are expected to face much of the wrath of the authorities in the immediate future.

 

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