The world of cryptocurrencies continues to be shaped and molded by ICO’s or Initial Coin Offerings. Similar to initial stock offerings for publicly traded corporations, the main goal of any ICO is to raise cash to support growth and expansion plans.
In a recent post on InvestOrChina.com, a recent ICO by a Chinese firm has raised 120 million yuan. This would be the equivalent of $18 million in US dollars. The report was released on Monday by Investor China. It identifies the Zhaoyun Group in Hangzhou, China as the company behind the offering. Zhaoyun Group operates primarily in the field of healthcare and scientific research.
Interestingly enough, the company’s official website does not include any information concerning the ICO. However, posts on social media through networks and forums indicate that the offering did take place in early April. The token sale was originally launched on April 8 according to the social media posts.
The information gleaned from social media also indicates that Zhaoyun Group set an original target of 170 yuan with the token sale. Using its own ERC-20-based tokens as an Ethereum standard, they were referred to as Trillion Cloud Gold or TGCG. It was reported that 10 percent of the sales were through a public offering.
Etherscan.io is a website that tracks transactions on the Ethereum blockchain. According to CoinDesk.com, recent data from this source indicates that the tokens were first created in mid-March of this year. However, there is no data recorded beyond that date for any further transactions. In subsequent conversations through WeChat groups, the report from Etherscan.io indicated that the public offering raised $18 million through a distribution system that was tired. Members would receive a return on their investment by attracting additional investors to buy in as well.
This process has come under question from a legal and ethical standpoint. The legalities have to do with China’s well-documented ban on ICO’s. The ethical issues point to the fact that this distribution system resembles the same attributes of a pyramid plan and Ponzi scheme. Words used in the report include “questionable’ as it pertains to the firm’s conduct. The firm’s business model has been described as “very similar” to the references made to an offering that closely resembles a pyramid and Ponzi scheme.
✓ Articles That May Interest You ·
This ICO coincides with the Chinese authorities increased efforts to crack down on crypto-related activities designed solely for the intention of raising funds. These same authorities are also stepping up their efforts to derail any individual or group efforts that are purposely trying to employ these illegal schemes to extract money from outside investors.
This is not the first time that InvestOrChina reported some questionable activities as they pertain to ICOs in the world of cryptocurrencies. It has worked hard to identify itself as a highly reliable source of information as it relates to the entire digital currency industry. Efforts to contact Zhaoyun Group for a clarification of this matter from its perspective have gone unanswered as of the June 4 posting of this report.
Previous News Article: Fitrova ($FRV) And ZetaMicron ($ZMC) Surge Over 300%