Li Xiaolai, the founder of Beijing-based a newly activity capital firm BitFund and a widely authorized billionaire Bitcoin investor in China, has publicly cited that he will personally leave at far distant from the blockchain and initial coin offering (ICO) space.
He informed on China’s largest social media platform Weibo:
“From this day on, Li Xiaolai personally will not invest in any projects (whether it is blockchain or early stage). So, if you see ‘Li Xiaolai’ associated with any project (I have been associated with countless projects without my knowledge, 99% is not an exaggeration), just ignore it. I plan to spend several years to contemplate on my career change. As for what I’m doing next, I’m not sure just yet.”
Predicted Causes Behind his Decision:
The cryptocurrency market has acknowledged its fourth-worst correction in the past nine years, experiencing an 80 percent fall status within the past nine months. Yet, the vast majority of ICO and blockchain projects have kept most of their processions in Ethereum and Bitcoin throughout the bear market and the ICO market still has active to this day.
The plan of Li to suddenly present the ICO and blockchain portion was as some substance which provides energy by two particular factors: the crackdown on ICOs by the Chinese government and a significant increment in the number of frauds in the blockchain market.
In June, CCTV, China Central Television, a state-owned network; which is being controlled by the government, announced documentary on blockchain and accused that the technology has the strength to gain a status of success that is under orders of magnitude larger than that of the Internet.
The statement was reported by CCTV announced as a wonder for both the local cryptocurrency market of China and the global finance industry, essentially mentioned the ties of CCTV with the government.
CCTV issued summary:
“Blockchain is the second era of the Internet. The value of blockchain is 10 times that of the Internet. Blockchain is the machine that produces trust”.
Anyhow, less than two months after publishing of the report of CCTV, the government of China made strict laws its blanket ban on crypto, characterizing ICOs as unlawfully fund collecting assets and was prohibited any development of token sales within the country.
An official document reported by the government of China:
“Such activities are not really based on blockchain technology, but rather the practice of speculative blockchain concepts for illegal fundraising, pyramid schemes and fraud. The main features are as follows:
Risk of illegal activities, unregulated overseas markets and inability to track or monitor transactions made in ICOs.
Deceptive, opaque and concealed fundraising methods, relying on celebrities and influencers to manufacture hype around investments to tempt investors.
Illegal operations like profit-generating pyramid schemes and creating Ponzi schemes by describing them as ‘financial innovations.’”
Noticing the fame of Li as a high profile billionaire investor dwellers’ China and the government’s discontentment with the ICO market, it is highly likely that local rules have supported Li and his team at Bitfund to walk out of the blockchain market.
Stand in with Crypto:
Li and his fund still raised a significant amount of Bitcoin and also other essential cryptocurrencies, which must be estimated having worth over billion dollars. However, the fame of the investor became worse since his resignation from his role as managing partner of the $1 billion Hangzhou Xiong’An Blockchain Fund. The change was possibly decided to take back his brand value and to eradicate any association of his fund with illegitimate blockchain projects.
Mark Peter is a full-time member of the reporting team at Bitconews. He is a finance major with one five of writing experience. He has not held any value in Bitcoin or other currencies. He joins Bitconews as a freelance journalist, blogger and forex trader.
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