The people’s Bank of China jointly with other state agencies on August 24 issued a warning regarding the criminal activity associated with bloccano and cryptoprocta, especially those that “resemble ICO”.

In a statement, the Central Bank said that the scammers “operate under the guise of the blockchain, digital currencies and financial innovation.”

The authors of the statement were made by the people’s Bank of China, public security Bureau, Commission for the regulation of the insurance sector and two other state agencies. They agree that many of the popular projects are “not based on blockchain technology, but use the hype around that phenomenon of illegal Fund-raising”, acting as financial pyramids.

Representatives of the Bank of China noted that some companies advertise their products such promises as “the cost will only grow,” and “high profit, low risk”, which is typical for a Scam.

The people’s Bank of China identifies three characteristics of such fraudulent schemes:

  • Most of them operate on an international scale, relying on the Internet and social networks. For the collection of tools they use online payments. Some of these scammers create sites, renting located in other countries servers, and manage their products from abroad.
  • Scammers have resorted to deception and manipulation. They use the so-called airdrop, social media marketing and other tricks to make the audience believe that the value of the token will only grow.
  • They promote the idea of “passive income” and “dynamic income” to lure small investors.

Last week the Communist party of China issued guidance on the blockchain for government employees. The appearance of the document, called “Blockchain — a guide for leaders”, shows that the authorities do not apply to this technology hostility.