The investigation has shown that despite the government’s efforts to crack down on “ICO illegal financing,” investors can circumvent the law by using a “foreign shell” company, among other possibilities.
Xinhua reports that after China’s crypto regulations became more stringent, domestic virtual currency exchanges went overseas for registration — while appearing to be shut down within the country — and were still able to “provide trading services to domestic users.”
The agency specifically mentions Malta as a destination of choice, noting the existence of Chinese language versions of the now Malta-based companies. Xinhua also mentioned the use of Telegram messaging groups to coordinate with domestic Chinese users. Quoting an “insider source,” the news agency writes:
While authorities have attempted to block internet access to ICO projects in China, Xinhua states that most measures can be subverted by using a Virtual Personal Network (VPN).
Xinhua also claims that there are “self-media public companies” that play a role in advertising and promoting ICO projects within China.
China’s first outright ban of ICOs was enacted a year ago in September 2017. Earlier this month, the People’s Bank of China released a new document on its official website, stating that it would continue to guard against ICO and cryptocurrency-related trading risks.