Chinese State Media Warns of Scams in the Name of Blockchain Amid the Tech Frenzy

Chinese state media has recently launched a strike-hard campaign to crack down on scams in the name of blockchain technology and digital currency amid the blockchain frenzy following President Xi Jinping openly endorsing the technology last month.

On Nov.18, China Central Television (CCTV), the predominant state television broadcaster in Mainland China, aired an episode titled “Blockchain is not a Cash chain” in a prime-time program Focus Talk.

The program tells viewers that there are currently around 32,000 companies in China that claim to use blockchain technology, while only less than 10% of these firms are actually using or working on the technology. Most of these companies are just taking advantage of the concept of blockchain technology to create financial gains, and even some are naked scams.

According to data provided by the National Internet Emergency Response Center, 755 air coins (whose price has dropped to almost zero) and 102 scam coins have been monitored so far; China Judgements Online shows that the number of legal rulings involving blockchain technology in the country has reached a total of 566 to date.

The episode then reveals various forms of scams under the guise of blockchain and a number of illegal projects involving scam coins or air coins, so as to remind people to keep alert to them.

A lineup of state-owned media like Xinhua News and People’s Daily, among others, have also warned of the chaos and scams related to blockchain in the market as the speculation fever returns. Experts point out that with the booming of blockchain in China, regulators should speed up the making of the regulatory framework for the industry.

Chinese regulators have spent great efforts in removing frauds related to blockchain/cryptocurrency, while pyramid schemes running under the disguise of blockchain technology or digital currency shows no signs of abating, especially after President Xi’s blockchain endorsement and news that the country’s state-backed digital currency is coming out soon.

Though its intention is to crack down on scam coins and fraudulent companies under the disguise of blockchain, crypto exchanges are also targeted for the possibility that their platforms may provide transaction service for these scam coins.

Last Friday, financial regulators in Shanghai has issued a notice to clean up illegal cryptocurrency trading within the region. Meanwhile, crypto exchange Binance’s Weibo (Twitter equivalent) account was blocked; MXC, a popular crypto exchange based in Shanghai, was currently under investigation. A few weeks ago, a Beijing-based second-tier crypto exchange called Biss has been investigated by local police.

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