China’s Central Bank Extends Its Regulatory Scrutiny to Crypto ‘Airdrops’

[Nikko]

China’s Central Bank Extends Its Regulatory Scrutiny to Crypto ‘Airdrops’

China’s central bank, the People’s Bank of China (PBoC), has widened its scrutiny to include token airdrops, which it characterized as “disguised” Initial Coin Offerings (ICOs) in its 2018 financial stability report, published Nov. 2.

Using by now familiar rhetoric, the report reiterates the bank’s stringently anti-ICO and crypto trading stance, defining the former as “illegal” fundraising, and pointing to the widespread risks of financial fraud and pyramid schemes.

Signalling a new area of focus, the report warns that so-called “airdrops” are evading regulation around the public token sale model by issuing free assets to investors. According to the report, airdrops earmark a token reserve and then capitalizing on speculation in the market to inflate the assets’ value and drive their own profits.

The bank warns that such initiatives continue to rise in number, despite vigorous attempts to crack down on crypto token issuance in the country, and calls for “early detection” and redoubled vigilance on the part of regulators, alluding to the need for international cooperation to better protect investors.

Source: https://cointelegraph.com/news/chinas-central-bank-extends-its-regulatory-scrutiny-to-crypto-airdrops